Mar 14

13

Connections…

Posted by Joyce Clark on March 13, 2014
Posted in City Council Actions • City issue and actions • City of Glendale • Glendale elected officials • Glendale finances • Jobing.com arena | Tagged With: arena management bids, external audit, former City Attorney Craig Tindall, former Interim City Manager Horatio Skeete | 9 Comments

In the March 13, 2014 edition of the Arizona Republic there is a story by Paul Giblin and Craig Harris entitled Contract violated Glendale Policies. Here is the link: http://www.azcentral.com/story/news/local/glendale/2014/03/13/contract-violated-glendale-policies/6359209/ .

It reports that former City Attorney Craig Tindall may have used his influence to award a no-bid contract for the city’s external audit to a friend, Jose de Jesus Rivera of the firm of Haralson, Miller, Pitt, Feldman and McAnally. Apparently Tindall was close enough and comfortable enough to Rivera to send an email on his city computer soliciting tax exempt tuition funding for his son.

Typically contracts over $50,000 are required by city policy to go out to bid as a Request for Proposal (RFP). As a professional services contract that requirement may not have been necessary but there remains a question of undue influence. Surely for a contract of this dollar amount, while not required to go to bid, it may have been prudent to do so. Members of the Glendale City Council seem to be shrugging their shoulders while kicking the can down the road and alluding to “that’s the way it has always been done.” They don’t want any part of this latest debacle.

By the end of the external audit the cost would be over half a million dollars, ten times the amount required for an RFP. Rivera thought there would be an RFP and asked Tindall via email about its timing and release. Instead Tindall submitted a memo to then Interim City Manager Horatio Skeete recommending the use of Rivera and his law firm. Skeete wanted to put the contract out for bid and to issue an RFP but for reasons unknown that did not occur. The result of the external audit was to place blame on Skeete and to completely exonerate Tindall. Could it have been that Rivera, as Tindall’s friend, was well aware of the bad blood between Tindall and Skeete? As friends it appears plausible they may have discussed it. Did that knowledge play any role in the final outcome of the external audit? It seems to be worth your consideration and your decision.

Was the external audit result payback to Skeete by Tindall for having lost his bid to become Interim City Manager? It there a connection between Tindall’s failed attempt to become Interim City Manager and the audit conclusions? You will have to decide. It was a bloody battle for the position of Interim City Manager. Tindall’s supporters on city staff lobbied me and I assume, the rest of council, disparaging Skeete. No such effort occurred on the part of Skeete or any supporters he had. During this period Tindall apparently stalled contracts and other documents on his desk seemingly in an effort to further bloody Skeete’s nose. Council was evenly split between the two candidates and it was Alvarez who broke the tie in favor of Skeete. It appears that Tindall wanted the position far more than he was willing to admit publicly and was disappointed that he did not prevail.

The Republic story goes on to say that Tindall is under on-going investigation by the state Attorney General’s regarding the issuance of this no-bid contract. He is also under an on-going investigation by the state bar as a result of a complaint filed by former Councilmember Phil Lieberman regarding a presumed conflict of interest. Lieberman’s complaint alleges Tindall was employed by the city while he also was general counsel to IceArizona, successful bidders on the Jobing.com Arena management contract, constituting a conflict of interest. I do remember a conversation had with Tindall during the period of the Jamison bid for the arena management contract and his assertion that he was talking to other “serious” bidders ready to come forward if the Jamison bid failed. Was Anthony LeBlanc, of IceArizona, one of those “serious” bidders? How much information about the Jamison bid was shared with these “serious” bidders? Skeete alleged to me, and presumably other councilmembers, that Tindall appeared to be holding up negotiations as the Jamison contracts sat on his desk for inordinately long periods of time. When Skeete was queried as to his awareness of the most recent Jamison contract amendments, his response was that Tindall still had them and he had not seen them. Were these actions by Tindall more payback to Skeete or even worse, was it an attempt to railroad the Jamison bid in favor of these other “serious” bidders? I don’t know and don’t know if we will ever find out. All we know is that there are connections – between Tindall and Rivera; Tindall and Skeete; and Tindall and “serious” bidders for the arena management contract. What part these connections played in the outcomes is yet to be discovered.

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Mar 14

10

Monthly arena revenues to date

Posted by Joyce Clark on March 10, 2014
Posted in City issue and actions • City of Glendale • Glendale finances • Jobing.com arena | Tagged With: Arena Monthly Reports, City of Glendale, Coyotes, finances, IceArizona | 15 Comments

There are figures available for the first six months of the Jobing.Com management agreement covering from August, 2014 through January, 2014. No figures are available for February, 2014 even though we are in March of 2014. We can expect them at the end of March. Why it takes a full month to publish the figures is a mystery. After all, the city is directly reporting the figures supplied to it by IceArizona. The agreement took effect in August of 2014 and there were no ticket sales that month.

The monthly arena report reflects numbers supplied by IceArizona, manager of the arena. It reflects ticket revenues to the city on qualified ticket sales only. Non-qualified tickets could be anything from discounted to comped tickets. The qualified tickets per game do not reflect total per game attendance as reported publicly by IceArizona. The arena has a seating capacity of approximately 17,700. Some of the games were reported as sold out – standing room only. A portion of the ticket sales for those sold out games must have been discounted or comped and therefore not counted as qualified tickets requiring the surcharge of $3 per ticket. It appears as if the city is not earning the revenue it could. Perhaps more of these tickets should be considered as qualified. Here is a summary of the qualified tickets that actually earned the city revenue month by month:

# of hockey Ticket Surcharge divided Average number

events by $3 per game of Qualified tickets/game

August, 2013 0 0 0

September, 2013 1 $16,413 ÷ $3 5,471 (1 game)

October, 2013 7 $203,289 ÷ $3 9,680 (7 games)

November, 2013 6 $193,517 ÷ $3 10,751 (6 games)

December, 2013 4 $153,975 ÷ $3 12,831 (4 games)

January, 2014 10 $355,135 ÷ $3 11,837 (10 games)

A question that has never been answered satisfactorily is how come the Interest Income on the Escrow Account was posted at $4,620 as of September 30, 2013 and that number has not changed to this day? There is no posting of any accrual to that account in Oct.- Nov.- Dec. or Jan.

As of January 31, 2014 the city has spent $6,502,055 toward the $15,500,000 owed this year per the arena agreement. Offsetting revenues earned of $2.7 million have not covered the $6.5 million spent and to date the city has a loss of $3,705,324.

If there are no playoff games the total revenues for the city for FY 2013-14 which ends June 30, 2014 can be estimated at $6 to $7 million dollars. Add another approximate $1 million in Supplemental Ticket Surcharges ($1.50 per qualified ticket) for a total revenue estimate of $7 to $8 million dollars. The city will pay out $15.5 million this year. It is estimated that the loss will be somewhere in the neighborhood of $7.5 million dollars on the arena this year.

Then there is the annual arena construction debt payment at an estimated $12 million a year. It is offset by the sales taxes earned at Northern Crossing, Cabela’s, Tanger Outlets and the businesses in surrounding Westgate. It does not include sales tax earned inside the arena as that is counted as part of the arena revenue of $2.7 million to date. The estimate of the amount of annual sales tax earned from these sources is approximately $4million. That means the city will have to find an estimated additional $8 million to cover the shortfall on the arena construction debt.

The underperformance of both revenue sources: arena revenues and Westgate/Northern Crossing/Cabelas sales tax revenues will fall short and cause the city to pay an estimated $15 million this year over and above all revenues earned. The only ways the city can continue to subsidize arena expenses is to: raise the temporary sales tax and make it permanent; increase property taxes and reduce city services by eliminating some or privatizing. The question for every Glendale resident is, is it wise to continue to subsidize arena losses by raising taxes and reducing/eliminating city services?

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Mar 14

2

An idea whose time has come

Posted by Joyce Clark on March 2, 2014
Posted in Camelback Ranch Spring Training Facility • City Council Actions • City issue and actions • City of Glendale • Glendale elected officials • Glendale finances • Jobing.com arena | Tagged With: Camelback Ranch MLB Spring Training Facility, City of Glendale, financial debt burden, jobing.com arena, Mayor Weiers, State of the City | 1 Comment

Glendale Mayor Jerry Weiers delivered his State of the City remarks to a packed audience at the annual Glendale Chamber of Commerce dinner at the Renaissance Hotel on Thursday, February 27, 2014. Although his news about Glendale’s finances was dire it was also a fair assessment. He is to be commended for his forthright speech. Here is a link to a recap: http://www.azcentral.com/community/glendale/articles/20140228glendale-arizona-state-of-the-city-mayor-financial-problems-real.html . Here is also a link to a Mayor Weiers You Tube video that visually explains Glendale’s debt and revenues: http://www.youtube.com/watch?v=s2nBWBojUh0&feature=em-share_video_user .

He didn’t remark on how Glendale got to where it is today financially but I will because I was one of the council that got us there. Although I approved the arena I did not approve of Ellman’s plans for his development of Westgate. His “vibrant” building colors look like WalMart on steroids and his billboards are monstrosities. He also would not dedicate an additional land to place another eastbound lane on Glendale Avenue. I was more reluctant about Camelback Ranch but the deal called for future reimbursement by the Arizona Sports and Tourism Authority (AZSTA). I agreed because there were development plans in place for the surrounding land and an AZSTA reimbursement on the horizon.

Council knew we would never be a Scottsdale, the west’s most western town; or a Tempe, a college town; or a Chandler and Gilbert, with their high tech manufacturing. We believed that these facilities would create a niche, a branding of Glendale and that they would help to grow Glendale. After approval of Camelback Ranch the city began negotiation to place a USAA basketball training facility in the area. It looked as if we were about to add another major sporting facility. Glendale’s future looked bright.

There are two major contributors to Glendale’s current debt burden: Jobing.com Arena and Camelback Ranch Spring Training Facility. At the time of these facilities’ approval it was clear that Glendale could sustain the debt. Deals were in place to develop commercial and retail around both. They would generate new sales tax revenues to cover the expected construction debt. The arena did not have an annual management fee. Glendale’s economy was surging as was the national economy.

There was no hint of the Great Recession that would lay waste to so many of Glendale’s plans. Glendale’s sales tax and property tax revenues sunk like a stone as did its state shared revenue. Developers and their plans dropped like flies as one after another went into bankruptcy.

Suddenly the city’s debt had become unsustainable.

What was council’s plan back in the day? It was three fold. Pass a temporary 5 year sales tax increase to provide much needed revenue while other strategies took hold; restructure our debt; and embark on a 5 year plan of targeted cuts to expenses while rebuilding the city’s contingency fund. It was even suggested, at the time, by Interim City Manager Skeete that the city sell the arena. I was shocked by the thought at the time but over time, it has become an idea that has a great deal of appeal.

It is no coincidence that Glendale’s future debt burden is about $30 million. That is very close to the city’s annual arena debt: $12-13 million in an annual construction debt payment; $500,000 to $1 million annual payment to a capital repair account; and $15 million in an annual management fee. The solution of selling the arena at fair market value is now very appealing. While the city loses money already invested in the facility the bleeding stops. Suddenly there would be no more construction debt; no more annual management fee and no capital repair account to maintain. It’s an idea whose time has come.

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Feb 14

22

Camelback Ranch

Posted by Joyce Clark on February 22, 2014
Posted in Camelback Ranch Spring Training Facility • City issue and actions • City of Glendale • Glendale finances • Jobing.com arena | Tagged With: Arizona Sports and Tourism Authority, Camelback Ranch MLB Spring Training Facility, City of Glendale, City of Phoenix, construction debt, Dodgers, finances, revenue, Right Path Limited, White Sox. Jobing.com arena | 5 Comments

On Tuesday, February 19, 2013 the city council’s afternoon workshop was devoted to an informational presentation by staff on the history of Camelback Ranch. It’s a good a time as any to review what happened and how did Glendale get into this financial sinkhole? For the record, I did support this project and voted in the affirmative.

Camelback Ranch was first discussed in the spring of 2006. Keep in mind, the national economy was booming. Glendale was earning record revenues. That was the character of the economic climate in which the decision was made to move forward. No one had a crystal ball foretelling of the Great Recession about to descend upon the country. There was no issue with the arena. Steve Ellman had just sold his interest in the Coyotes to Jerry Moyes who became the new arena manager. The city was not paying an arena management fee. It would be 2009 when Moyes declared bankruptcy and the national recession hit.

Council had commissioned an economic impact study by Economic Research Associates released in March of 2006 to determine the potential financial impacts of the proposed Camelback Ranch project. It said the potential estimated direct economic impact of the two teams would be $14.9 million a year if used only during the spring training season and $19.2 million if the facility was used year round. Part of that estimate took into account that Right Path Limited would be developing the land surrounding the actual ballpark facilities. It was against this backdrop that council moved forward with approval for the project.

It was a complicated deal. Glendale’s partners were or are: the City of Phoenix; the Arizona Sports and Tourism Authority; the Dodgers and White Sox teams; and Right Path Limited (as the developer).

Camelback Ranch is located physically within Phoenix. Glendale purchased the parcel on which the major league baseball facility (MLB) sits as well as several other parcels for commercial/retail development. Phoenix’s obligation in the deal is to pay 80% of the sales tax it received on this site for 40 years up to a maximum amount of $37 million. It was its contribution toward the development of the site. In return Glendale assumed the obligation of paying Phoenix for a specific right-of-way and land adjacent to that right-of-way. The deadline for that purchase in the amount of $3.7 million is October of this year. If Glendale reneges all terms of the Phoenix/Glendale Intergovernmental Agreement (IGA) become null and void. From 2009 until 2013 Glendale received over $200,000 from Phoenix in sales tax revenues.

Ralph Burton, principal of Right Path Limited, was to be the developer of the land adjacent to the MLB facility. At the time Glendale had a great deal of confidence in him. He had been very instrumental in Cabelas locating in the Westgate area. He had purchased a substantial amount of land along the western side of Loop 101 named “Main Street” and there were plans in the works to site the Olympic basketball training facility and headquarters there. He had taken over the airport fixed base operation (FBO) and had performed major renovations. He unfortunately partnered with Danny Herndon (of Danny’s Car Wash fame and illegal immigrant workers) and Bob Banovach to develop the Main Street project. It wasn’t long before there was in-fighting between them resulting in litigation. In the meantime the recession factored into their development plans. All plans ground to a halt and ended in bankruptcy.

The Dodgers and White Sox agreement with Glendale stipulated that they would operate and maintain the facility. Capital repairs would be Glendale’s obligation. They were required to pay $1 a year for rent. There is no management fee obligation for Glendale. Glendale is responsible for providing public safety services but the revenue it receives appears to cover those costs.

The Arizona Sports and Tourism Authority (AZSTA) pledged to cover 66.7% of the project’s costs as it has historically done with other baseball spring training facilities in Phoenix, Mesa, Peoria and Surprise. Reimbursement was originally scheduled to begin in 2017 but again, the recession destroyed that schedule. AZSTA’s revenues dwindled and the new projection for payments to Glendale is now scheduled for 2025-2026.

The debt service for construction of the project range from a high of $17 million in FY 2014-15 to a low of $9 to $11 million in subsequent years. Glendale is obligated to contribute to a Capital Repair account with annual payments of $400,000 to $800,000.

The financial obligations of Camelback Ranch and Jobing. com Arena are substantial for Glendale. The annual financial requirements of these two city owned facilities are clearly unsustainable. Camelback Ranch requires infusions ranging from a high of $18 million (debt service and Capital Repair account) to a low of $10 million a year. Jobing.com Arena requires an annual management fee of $15 million and annual debt service of approximately $13 million. Add to those figures the $5 million a year owed to the NHL, the annual contribution to the Capital Repairs account of half a million to a million a year and another million to repay the city’s Enterprise Funds and we’re looking at a low of $28 million a year to a high of $34 million a year. Combined these two facilities require cash infusions each year from a low of $38 million to a high of $52 million. A disclaimer is in order. Since I am no longer on city council I am not privy to current financial information and obligations related to these facilities that may be considered confidential. However, the underlying concepts remain valid. Some of the cash required by these facilities may be offset by revenues they generate. We simply will not know how much offset there is for the arena until the start of the next fiscal year on July 1, 2014.

Is there any solution available? Perhaps yes. The many partners and contractual obligations associated with Camelback Ranch do not lend themselves to a sale by the city of Camelback Ranch. However, Jobing.com Arena is not in the same situation and could be sold. In doing so it removes substantial annual debt service and management fee obligations from the city. It is an option that merits consideration. Personally, I would be sad to see the city lose the arena but sometimes ya gotta do what ya gotta do.

As a side note I am discontinuing my informal polls, at least for now. It is obvious that those for or against an issue are padding the results by voting repeatedly. The results of the poll have now become meaningless.

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Feb 14

21

Joe Hester response to fire truck bid issue

Posted by Joyce Clark on February 21, 2014
Posted in City issue and actions • City of Glendale • Glendale finances • Glendale's Fire Union | Tagged With: City of Glendale, fire truck bid, Joe Hester President of Glendale Fire Union | 8 Comments

On the afternoon of February 20, 2014 Joe Hester, President of Glendale’s fire union posted the following comment on my blog post about the fire truck bid. I don’t just mouth that I believe in transparency. I act on it. That is why I am posting his comments in this separate blog along with my public, not private response to him. Below is Mr. Hester’s comment followed by my response.

Joyce,I am flattered on how much you have been writing about me; I had no idea until phone call today. I know you would want your son to be in the safest vehicle possible in the event he was in an accident while responding to a 911 emergency. I also believe you would want any firefighter to go home safe to their family. As you are aware Mr Lester Hillis Glendale Fire’s only line of duty death was a result of a vehicle accident; so I hope you can appreciate my position, putting politics aside.I will respond to Mr Noeding memo and provide my response to whoever would like to see it, including the media. I can also accommodate an exclusive over lunch with an old friend to provide you as much detail as you would like ;perhaps at your favorite lunch place Gordon Biersch and my treat?I would also like to thank you for your continued involvement with our firebase strategic plan.all the best,Joe

*********************************

Mr. Hester,

I prefer to respond publicly to your comment about my recent blogs about the fire truck bid. My blog comments on this issue have not been personal. Keep my family out of this discussion. They are not involved in my blog writing.

I find your comment about flattery to be disingenuous. Perhaps it was your attempt at humor.

I participated in your firebase strategic plan because it is critical that the department cut all but essential services and adopt new methods and strategies of operation to deal with Glendale’s financial deficit. I found the exercise to date to be informative to any citizens participating who have no knowledge of all of the services offered by fire.

I did not appreciate that all questions about budget such as, what is each unit’s current budget? were sidestepped and answered with, you can refer to fire’s current budget or can follow the council’s current budget discussions. How can one determine the value of a service offered or make a determination about it when no financial information is provided?

The current bid for the fire truck seems to reek of corruption. I am curious why you felt it was necessary to insert yourself into the discussion. I would think that would be Fire Chief Burdick’s responsibility. It is an issue and a bid process that is administrative and therefore best handled by the City Manager.

The fire union’s power disturbingly, has become more and more evident everywhere, especially at election time. Sammy, a Phoenix fire fighter, is obviously very much an advocate, as your councilmember, for fire’s ambitions. As the curtain parts more and more citizens (taxpayers) are learning of the union’s agenda and tactics and beginning to realize it does not always act in their best interests.

It would serve you well to remember that the pen is mightier than the sword. Since my blog’s inception, a year ago, there have been over 95,000 views and my recent blogs on the fire truck bid are nearing 2,000 views. There are many people, especially Glendale residents, very interested in Glendale issues, most particularly at this moment, in this one.

As for a lunch meeting, bring it on. I’m game and not in the least intimidated by the fire union. I guess that’s why you all worked so hard and invested so much time and money in a local election. Feel free to shoot me some dates at: clarkjv@aol.com.

As you can see I have taken down my informal poll for the time being. It seems some people simply cannot play by the rules. Someone or several people decided to stuff the votes by voting repeatedly thereby making the poll meaningless.

By the way, if YOU have a question for the fire union president, take a moment to offer them to me as a comment to this post. Thanks.

FAIR USE NOTICE

Feb 14

20

Freightliner fire truck bid

Posted by Joyce Clark on February 20, 2014
Posted in City Council Actions • City issue and actions • City of Glendale • Glendale finances | Tagged With: City of Glendale, fire truck bid, Freightliner, Freightliner bid, Joe Hester | 3 Comments

Here is the letter Freightliner sent to Joe Hester, President of the Glendale Fire Union. Note that it was copied to the City Manager, the City Attorney, the Mayor and all Councilmembers and the Glendale Star. I apologize if the formatting is a little wonky. I am still not an expert on all things blog.

February 17, 2014

Joe Hester

Captain, Glendale Fire Department

Vice President, United Phoenix Fire Fighters Association

Glendale, AZ

Dear Mr. Joe Hester.

I am shocked that you are attacking Freightliner Arizona with baseless facts and trying to characterize our organization as not wanting to support the safety of the Firefighters in Glendale.

In your opinion piece, “Fire Truck Manufacturers Should stick to the Facts”, you point out that Freightliner of Arizona was offering an inferior product that lacked the Extruded Body and Cab, the Telma Auxiliary Brake in our proposal. Maybe you never got a chance to look at our proposal, but it included those items at a price of $422,838, plus tax.

We spent a great deal of time trying to get specific information in written form so we could verify we were providing exactly what Glendale Fire wanted. What we received were a couple of verbal “Must Haves”: Extruded Body and Cab, Telma Brake and Electronic Valves. These items were all supplied in our proposal. We even went as far as going to a Glendale Fire Station to measure the body and compartment dimensions so we could have Rosenbauer duplicate them and draw up the apparatus to best match the equipment being used by the department today.

It is insulting that you or any Fire Fighter might feel that Freightliner of Arizona would condone providing inferior or unsafe Fire Apparatus to any community, least of all Glendale Fire. We know that there are severe budget issues facing the community and some of the “must have options” are very expensive and not widely used throughout the industry. Freightliner of Arizona’s proposal included all of these items, but communicated to the Department that there were less expensive more widely used options that could be provided; Thus, saving the Department and Glendale money so that these funds could be used for other purposes in the Department.

You claim that all of the communities around Arizona have these options. I would ask that you investigate this claim, because you will find that 80% do not have Extruded Bodies and that 90% do not have Telma Brake and about 90% do not have electronic valves. These items are available on Fire Trucks and fit certain purposes, but the cost versus the benefit has been reviewed by most of your fellow fire fighters and they chose not to have these items on their apparatus. I am sure that you feel that these are needed in Glendale, but the majority of fire fighters do not. There is no data that would indicate that these items improve safety for a fire fighter. If there was, the National Fire Protection Association, which provides governance over Fire Fighter Safety, would require these devices on all fire apparatus.

Freightliner of Arizona has been providing Fire Apparatus and parts, service and warranty to Arizona Fire Departments since 1998, and did not just return to selling Fire Trucks as you said. We have participated with most of the major Fire Departments in bids and RFP’s. We have never had to approach a City Council about how we were treated in the procurement process. We have never suggested that Fire Fighters should ever be put in unsafe apparatus or conditions. We believe quite the opposite! We understand, probably better then most, the importance of fire fighter safety and how vehicle specification and design can insure it.

Joe, it is extremely unfortunate that you have been misinformed about what we provided to the Glendale Fire. I am providing you a copy of what we submitted to Glendale so you can confirm what I am telling you is the truth. I hope you realize that our objection on the way the procurement process was handled was not an attack on Glendale Fire Fighters, but on the people who were responsible to conduct themselves as professionals and fiduciaries of the community.

I think that when all the facts weigh in you will see that Freightliner of Arizona was mislead and provided inaccurate information on which we provided a proposal. The apparatus our competitor proposed to Glendale Fire was not the same design and more expensive resulting in the Council being asked to approve $484,000 plus dollars instead of the $422,838 we bid. With tax that only comes to $ 57,934. That leaves over $26,000 unaccounted for! Doesn’t that concern you? It sure did us! Especially when we knew we included the “Must Have” components and told that our bid was high bid! It just doesn’t add up!

Freightliner of Arizona is not the enemy of Glendale Fire Fighters. That is not why we brought this issue to the Council. We did it because the procurement process to purchase this new Fire Truck was broken. We want to participate in a fair and transparent process where the most competitive and responsible bidder wins the award! We look forward to participating in the new RFP that Glendale Fire will be issuing. We hope the process will be fair so if we can provide the best, safest and most competitive Fire Truck, we hope Glendale Fire will want to do business with us.

Respectfully,

Timothy Noeding

General Sales Manager

9899 W Roosevelt St.

Tolleson,AZ85353

Cc: Mayor Jerry Weiers

Manny Martinez

Yvonne Knaack

Gary Sherwood

Sam Chavira

Ian Hugh

Norma Alvarez

Brenda Fischer

Michael Bailey

Glendale Star

Here is the Freightliner bid document. Freightliner represents Rosenbauer in Arizona:

Bid Price and Delivery Schedule For

************ City of Glendale ***********

Rosenbauer America, LLC is pleased to provide this bid proposal. The proposed apparatus has been tailored around the requirements of the fire service industry and we are confident that our proposal will meet and exceed the needs of the department. The proposed apparatus will be constructed utilizing only the highest quality materials and workmanship available in the industry. The apparatus will provide the upmost firefighter safety and efficiency on the fire ground along with extended life and lower maintenance cost throughout the life of the vehicle.

[1] Rosenbauer Commander pumper w/EXT body: $422,838.00 plus tax and HCAC fees

* See page 2 for prepayment discounts and page 3 for additional options

The specifications herein contained shall form a part of the final contract, and are subject to changes desired by the purchaser, provided such alterations are interlined prior to the acceptance by the company of the order to purchase, and are provided such alterations do not materially affect the cost of the construction of the apparatus.

The proposal for fire apparatus conforms to all Federal Department of Transportation (DOT) rules and regulations in effect at the time of bid, and with all National Fire Protection Association (NFPA) guidelines for automotive fire apparatus as published at the time of bid, except as modified by customer specifications. Any increased costs incurred by the first party because of future changes in or additions to said DOT or NFPA standards will be passed along to the customers as an addition to the price set forth above.

Contract Terms

Delivery:

The proposed truck will be completed in no more than: 330-360 Days ARO

Price Terms:

This offer shall remain valid for thirty, (30) calendar days from the quotation submittal date of November 22, 2013

Payment:

Contract payment of one-hundred percent (100%) of the purchase price shall be paid upon delivery and acceptance of the completed unit.

Prepayment options:

As an option Rosenbauer is offering a prepayment discount should the City wish to 100% prepay for the apparatus at the time of order. This option will include a 100% performance to guarantee the production of the unit. The prepayment discount would be $5,707.00 and would drop the sale price to $417,131.00 plus tax and HGAC fees. The tax rate would drop from 8.3% to 5.6%.

Original price $422,828.00 + $35,096.00 (8.3%) = $457,934.00 plus HGAC fees

Prepayment price $417,131.00 + $23,359.00 (5.6%) = $440,490.00 plus HGAC fees

The prepayment option would save the City over $17,000.00.

I want to thank the City of Glendale for the opportunity to serve the needs of the department.

Sincerely,

Chad Horne

Rosenbauer America

Feb 14

12

Another edition of heard around the water cooler

Posted by Joyce Clark on February 12, 2014
Posted in City Council Actions • City issue and actions • City of Glendale • Glendale elected officials • Glendale finances | Tagged With: 2014 election, City Manaager Brand Fischer. Assistant City Manager Julie Frisoni, City of Glendale, councilomembers, former mayor Scruggs, Jamsheed Mehta, Mayor Weiers | 2 Comments

Jamsheed Mehta, Executive Director of Transportation, and briefly Interim Assistant City Manager for the City of Glendale is leaving on March 12, 2014 to serve the City of Marana. Jamsheed has been with the city since 2005 and in that period his quiet intelligence and competence has served the city and him well. It is disappointing to see that he did not receive the appointment as Assistant City Manager.

His departure may very well be a precursor to the exodus of other talented employees who see the handwriting on the wall under the current regime. Many have indicated their concern as City Manager Brenda Fischer (from the Town of Maricopa) surrounds herself with Town of Maricopa cronies or Glendale employees with questionable resumes earned under the tutelage of former City Manager Ed Beasley.

There is now a readily identified coalition within councilmember ranks that form a majority on most issues. It consists of Vice Mayor Knaack and Councilmembers Sherwood, Martinez and Chavira. The minority is Mayor Weiers and Councilmembers Hugh and Alvarez.

It is not so surprising that Knaack and Martinez would join with Sherwood and Chavira. Some have speculated that both are tired, burnt out and so have opted for the path of least resistance. Both will not be running for reelection and have blessed others to take their places. Martinez has endorsed Robert Petrone, seemingly a man of questionable substance considering his financial past. Knaack is rumored to pass her legacy on to Bill Toops, owner/publisher of the Glendale Star. A man who could experience conflict from the very start, if he runs and is successful in getting elected, as he tries to serve two masters: the paper which provides him income and a city which in the past has often dismissed his paper’s relevance.

Weiers has got to find a way to raise his visibility as Glendale’s mayor in the community. It’s a problem that all mayors in Glendale have had. It used to drive former Mayor Scruggs nuts. In poll after poll, most respondents could not name her as mayor and when they did, they often mispronounced her name as Scaggs or Shruggs. Weiers may be taking actions that are good for Glendale but unfortunately no one knows what they are. He should be wary of Councilmember Sherwood’s ambition.

It is said that Sherwood is in his office in City Hall every day and has de facto assumed the role of Mayor. Why not? Sherwood has the ear of the City Manager. Sherwood is riding high these days with 3 other votes behind him but fortunes can change on a dime. One of his more questionable actions was to actively insert himself into the selection process for a new City Manager. It is said that he met privately, one-on-one, with Ms. Fischer during the process and then actively solicited support of the other councilmembers for her acceptance. There is nothing illegal about his action but ethically it is highly unorthodox. No other councilmember in memory has ever had a private, one-on one with a potential City Manager candidate and then actively lobbied for same.

Everyone acknowledges that Fischer owes Sherwood big time for her hiring. Also of note is Fischer’s spouse is either still a fire fighter in Henderson, NV or was a fire fighter there for years. Add to that Frisoni’s spouse is or was a police officer. Will these relationships color their actions toward public safety? We may have seen it already as one of Fischer’s first actions was to bring the fire department deficit before council allowing it to receive additional funding. No other department received that kind of consideration.

Chavira, on the other hand, appears to be silent, nearly invisible, merely along for the ride, cutting the best deals that he can for him and his fire department union buddies. That is not surprising either as we have seen questionable fire union actions involving his participation prior to his successful bid for a council seat. Alvarez’ past actions and record make her irrelevant. She has a record of contributing little or nothing to crafting solutions. Hugh, on the other hand, has an opportunity to break out. There have been a few flashes when he has spoken that give hint to a thoughtful man.

Based upon the current political landscape where is Glendale headed? Perhaps down the proverbial rabbit hole where “up “is “down” and “down” is “up.” Glendale appears to have two paths before it: Bankruptcy where city debt and rising O&M expenses are so high that no amount of palliative change orchestrated by Fischer, et.al., can save it; or a Glendale saved from falling over the cliff but divested of all that we love about it, lean and mean, soulless but saved.

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Feb 14

10

Disappointing

Posted by Joyce Clark on February 10, 2014
Posted in City issue and actions • City of Glendale • Glendale finances | Tagged With: bid for fire truck, City of Glendale, E-One, Freightliner, Glendale Fire Department, Glendale Fire Union | No Comments yet, please leave one

This is a follow up to my recent blog of February 5, 2014, “Here come da Chief.” New information has become available, most specifically, a letter from Freightliner distributed to all councilmembers which is now a public record. It raises some very interesting questions.

Apparently the fire union chose E-One as the successful bidder. The process was handled internally by the fire department, not the city and not its Procurement Division. Perhaps Procurement would have been more appropriate to handle this transaction. You will remember that questions were raised by Freightliner the night of the council meeting during the Public Comment when this item was on the agenda for council approval. It was pulled by the City Manager and it looks like the process will be repeated with a formal RFP process this time. It seems someone’s hand was caught in the cookie jar.

Freightliner has been around for quite some time and has been the successful bidder on multiple occasions throughout the state. E-One not so much. The City has previously used E-One to supply some of its equipment. Apparently Wayne Smith (who handled the current process), Don Jesse and others have had a close relationship with E-One since it began operation. Some of these gentlemen appeared to have either ownership interests or were employed by E-One. If true, that alone, is sufficient for their recusal from the process.

The city received an excellent bid from E-One but how? Apparently Wayne Smith was frantically calling Freightliner representatives at 4:30 one morning to secure specific information on their bid. Did Smith provide this information to E-One so that it could tailor its bid to come in $3,000 lower than Freightliner’s bid?

We know the E-One bid was higher than the grant monies provided for the fire truck’s purchase. It appears the purchase can be made for less money. Why is a department which is sorely in need of revenue with many other needs, such a new firefighter gear, wasting money by asking for fire truck options that are outdated and frankly overkill? According to Wayne Smith’s conversation with Freightliner representatives, it appears that the fire union was requiring these options. Why?

The city has historically used a traditional pumper. The E-One bid was for a rescue pumper with a different design from that which Glendale currently uses. It would require extra training for its use. How much would that have cost the city?

E-One is a company that seems to be struggling. It is currently owned by a hedge fund and has had a succession of presidents lately. Apparently their ability to offer maintenance and support for this bid is dwindling and in doubt.

This particular bid process seems to reek of favoritism and may very well be unethical. Apparently Glendale continues to have problems in practicing ethical behavior, even under its new senior management. The universal hope was that there would be a new era of leadership. Yet all signs point to a continuation of previous behavior. How disappointing.

FAIR USE NOTICE

Feb 14

10

Velvet glove or sledge hammer?

Posted by Joyce Clark on February 10, 2014
Posted in City Council Actions • City issue and actions • City of Glendale • Glendale elected officials • Glendale finances | Tagged With: city council, City Manager Brenda Fischer, City of Glendale, Craig Tindall, finances, Jennifer Campbell, Julie Frisoni, Michael Bailey, Tom Duensing | 5 Comments

City Manager Brenda Fischer announced that effective March 3, 2014 Julie Frisoni and Jennifer Campbell will become Assistant City Managers in Glendale. Let’s begin this exercise by reviewing the Human Resources requirements for the position. As of July 1, 2008 the last time the position was reviewed it required a “Master’s Degree in Public Administration, Business Administration, Management, or a related field and ten years of progressively responsible administrative experience in a municipal government organization with five of those years being in a municipal management position. Any equivalent combination of training and experience that provides the required knowledge, skills, and abilities, is qualifying.”

Jennifer Campbell has a master’s of education degree with an emphasis in leadership and public administration from Northern Arizona University and a bachelor’s degree in recreation management from Arizona State University. Campbell has more than 16 years in municipal government positions at the Cities of Peoria and Goodyear and, most recently, at the City of Maricopa as community services director.

Frisoni holds a bachelor’s degree in communications from Arizona State University and since 2002 (12 years) has worked for Glendale rising to Executive Director of Communications and Marketing. You will note that a master’s AND a minimum of ten years experience is required. Frisoni may have the years but she has no master’s.

Some will make the case that they are qualified due to the numbers of years of experience each has accrued for it certainly won’t be due to their educational qualifications as neither has a master’s in the requisite areas of public administration, business administration or management. It will be argued that both meet the minimum qualifications with a combination of training and experience. They may or may not but the kind of experience that both have amassed is of consideration.

Their Assistant City Manager functions include:

Provides administrative direction to the Deputy City Managers for their areas of responsibility in working towards the achievement of goals for the individual department(s) and the City of Glendale.
Manages the daily operations for the City of Glendale.
Serves as a member of the City’s top management team in establishing and maintaining good management policies and procedures.
Reviews the activities of the general operation to determine efficiency; confers and assists the City Manager in formulating a business strategy.
Advises the City Manager of issues and operational progress through oral and written reports.
Interprets and implements policies received from the City Manager and the City Council. Provides administrative direction and support to staff in analyzing, developing, implementing and evaluating policies, programs and procedures.
Advises staff on major projects and in resolving conflicts and problems.
Represents and supports the policies of the city to members of the public, press, and civic groups.
Represent the City Manager during his/her absence.
Reviews annual city budget and makes recommendations to the City Manager

“With these two appointments, the city is continuing to embark upon a continued direction of stability in our senior management organizational structure with seasoned professionals who have demonstrated a dedication to serving the public,” said Fischer. “Both Ms. Frisoni and Ms. Campbell share my vision and approach to local government management, including fiscal responsibility, open and transparent government, collaboration and excellent communication skills.”

The stage is now set and the cast of characters complete. At the helm is Brenda Fischer from the Town of Maricopa. Directly under her is Jennifer Campbell from the Town of Maricopa and Julie Frisoni, a member of former City Manager Ed Beasley’s “inner circle.” To round things out Michael Bailey is the new City Attorney. Bailey had or has close ties to former City Attorney Craig Tindall who sent the alleged and now infamous email solicitation on a city computer requesting consideration of his son when making a school tuition tax deductible donation. One of those on his recipient list was none other than…Michael Bailey. Add to this mix the new Executive Director of Finance, Tom Duensing, who also comes from the Town of Maricopa. The consolidation of power continues. Fischer has surrounded herself with former allies from Maricopa and others with ties to former City Manager regime. Those who have demonstrated records of competence and expertise, such as Stuart Kent, Jon Froke and Erik Strunk, are ignored. Palace intrigue has a new home and off with the heads of anyone who dares to challenge their agenda.

More disturbing is that these actions signal the end of an era in Glendale. For the 46 years that I have lived in Glendale, even when it experienced tremendous growth, it still retained a small, intimate hometown atmosphere. A good example is citizen volunteerism for city Boards and Commissions. For years council had no problem filling those positions and often had a waiting list. Why? Because people felt that they had the power to actually effectuate change. Their councilmembers and senior management staff were accessible to them and very responsive. They were not necessarily satisfied every time but response was immediate. There was a genuine connection between those who ran the city and those who lived in the city. Senior management staff often had lived in the city for years and had developed strong roots and a genuine interest in their community. All of that is gone. Today we have citizens with no deep ties to Glendale, expecting to move on because of job circumstances, familial reasons or simply with an itch to go someplace new to them. There is no cultivation of appreciation for Glendale and what it means in their lives. There is no waiting list to serve on a Board or Commission any longer. In fact, some volunteer positions go unfilled for extended periods of time.

Today we have senior management in positions of leadership with no historical memory of Glendale. You can see it when Tom Duensing is asked about transfers in previous years from the arts fund into the general fund and he has no clue, responding that he will have to get back to council after he has done some research on the issue. Gone are the Charlie McClendons, Paula Illardos, Grant Andersons, Jim Devines, David Prescotts, Ken Reedys, Rodeane Widoms, Lillian Hamiltons…who had a genuine love of Glendale, deep roots and vast historical memory.

Now those running Glendale consider it a “business.” The bottom line is paramount without any genuine sensitivity for how their decisions will impact the quality of life of its residents. Yes, they will probably dig Glendale out of its current fiscal crisis but at what cost to the heart and soul of a once great city renowned for its connection to its residents?

What about the current city council? So far they have abdicated their leadership roles to senior staff as they appear unable to come to grips with the fiscal crisis. Mayor Weiers tailors his actions to a reelection bid. Vice Mayor Knaack attempts to appease all. Councilmember Sherwood embraces the new “business” model. Councilmember Chavira is silent. Councilmember Alvarez is full of bitterness and negativism. Councilmember Hugh damaged by his close ties to Alvarez is ineffectual. Councilmember Martinez, as a lone voice, has flashes of remembrance of the essence of Glendale. None question or challenge deeply allowing themselves to be swept by the tide of fear that engulfs them. After all, it far easier to let senior staff make the decisions and simply accede to their recommendations. Ultimately council is responsible for the demise of Glendale as long time residents have known it and loved it. It is sad and deeply disappointing to watch events unfold. That is not to say change should not be embraced for change is necessary to survive. Will it be done with sensitivity and a velvet glove or bludgeon the city with a sledge hammer?

FAIR USE NOTICE

Feb 14

8

There are two elephants in Glendale’s room

Posted by Joyce Clark on February 8, 2014
Posted in Camelback Ranch Spring Training Facility • City Council Actions • City issue and actions • City of Glendale • Glendale finances • Jobing.com arena | Tagged With: budget, City of Glendale, Executive Director of Public Works Stuart Kent, finances, Glendale city council workshop, jobing.com arena, Renaissance Convention Center, Renaissance Media Center, Renaissance Parking Garage, Rider Levett Bucknell Ltd., Total Life Cycle Cost Assessment | 6 Comments

The afternoon workshop session of the Glendale city council of February 4, 2013 was a presentation by Stuart Kent, Glendale’s Executive Director of Public Works (there’s that pesky Executive Director title again!) and the consultancy firm of Rider Levett Bucknell, Ltd. (RLB) at a cost of slightly over $100,000. The presentation was a Total Life Cycle Cost Assessment of the city owned facilities of: Jobing.com Arena; Renaissance Hotel Convention Center & Media Center; Renaissance Parking Garage and Camelback Ranch. Here is the link to the slides used for the presentation: http://www.glendaleaz.com/Clerk/agendasandminutes/documents/01PPT-TLCCAssessment-FinalFinalWorkshopPresentation.pdf .

The afternoon session was over in the blink of an eye, and lasted for about the half hour it took to make the presentation. Councilmembers eyes glazed over and there was only one question from Councilmember Martinez on a point on which he needed clarification. Did these councilmembers read this report? Your guess is as good as mine but I would wager most of you would say they did not read it. Well, I did – all 150 pages plus. I even had to find one of my Dad’s magnifying glasses to read all the exhibits which were compressed into teeny, tiny print to fit on an 8 1/2” X 11” sheet of paper. That was no mean feat.

The city can’t catch a break. The financial news goes from bad to worse as contractual costs of maintaining these facilities contribute to the ever-mounting bills the city must pay every year. RLB uses a 50 year life cycle for these facilities. They believe these facilities will last for 75 to 80 years. While that may be accurate, it seems that in 20 years or so the tenants will demand facility updates to remain competitive. That issue was never asked and never addressed. Here are the more important “take aways” from RLB’s Assessment.

Take Away #1: From the Workshop Council Report, Page 1: “The facilities are managed by the current tenants, with associated costs for operation and basic maintenance the responsibility of the tenants. The cost for the capital replacement and repairs are the responsibility of the city in each of the facility agreements.”

Take Away #2: The chart below is an estimate only. The figures could be higher or could be lower than projected or council may decide to delay some improvements.

Capital Improvements: Budget Recommendations, 5-Year Summary

FACILITY	FY 2015	FY 2016	FY 2017	FY FY 2018 2019		Totals
Jobing.com Arena	$4.9M	$3.1M	$0.0M	$0.3M	$9.6M	$17.9M
Renaissance Convention & Media Center	$0.3M	$0.5M	$0.6M	$0.0M	$0.2M	$1.6M
Renaissance Parking Structure	$0.1M	$0.0M	$0.9M	$0.0M	$0.1M	$1.1M
CamelbackRanch Park	$2.1M	$0.1M	$1.3M	$0.7M	$1.9M	$6.1M
Totals	$7.4M	$3.7M	$2.8M	$1.0M	$11.8M	$26.7M

Take Away #3: Assessment Page 5: “The (arena) facility includes adjacent sitework, parking areas and a service road.” On Page 9 of the Assessment it says, “The City shall be responsible for capital maintenance of the arena Parking Area, which shall include but not be limited to striping, patching, and resurfacing. Section 8.2.1(d).” Yet the city only receives parking revenue after the first $20,000 per event goes to IceArizona. One would think there should have been some cost sharing for repair and maintenance negotiated.

Take Away #4: Although on page 7 of the Assessment it says it provides the following, no attached facility condition assessment checklists were provided in the report. “The defective items are listed in the attached facility condition assessment checklists and evaluated in the attached facility condition assessment estimate.” It is an important omission. The NHL when managing the arena identified the roof as needing major repair at an estimated cost of $2 million. Without the defect list it is difficult to determine if immediate major roof repair of the arena is included. Defects are categorized under the following headings;

Programmed Maintenance
Preventive Maintenance
Unscheduled Repairs
Emergency Repairs
Deficiency Repairs”

Take Away #5: Page 21 of the Assessment states, “Based on review of the information received to date RLB believes the current building related Sustainment, Operations and Maintenance costs are in the region of $10,000,000 per annum (for the following items):

Custodial
Energy
Grounds
Maintenance & Replacement
Management
Pest Control
Refuse
Security
Telecom
Water & Sewer”

It continues on Page 22 with, “In addition to the above noted items there are other additional event-specific related Operational costs (direct event labor and expenses) which currently cost up to $4,000,000 per annum, depending on the number of events being held at Jobing.com Arena. At the time of commencing this TLCC Assessment RLB understood that a portion of the event related expenses were being reimbursed by the National Hockey League (NHL).” To whom?

Take Away #6: From 2003 to 2013 the Projected Arena Income was a negative $43,319,000. When you think about it, it is logical. From 2003 to 2009, 6 years, the city paid no management fee. Since then the city paid the NHL $25 million a year for a total of $50,000 million. There were revenues earned during that period but not enough to cover that major expense. What should be of concern that from 2014 to 2018, the next five years, the projected revenue income is projected to be a deficit of $20,577,000.

Take Away #7: There are 910 parking spaces in the 4 level parking garage per page 7 of RLB Renaissance Parking Structure Assessment. On Page 13 it states that the Hotel has 460 garage spaces + 240 surface parking spaces. Jobing.com Arena Management is allotted 450 of the garage parking spaces. Those are premium parking spaces for which IceArizona charges $20 or $25 per space.

Take Away #8: On Page 28 of the RLB Camelback Ranch Assessment it states, “As noted previously within this report, RLB did not receive any detailed, specific information pertaining to current Sustainment, Operations and Maintenance costs for Camelback Ranch Park. Based on RLB’s review of a 2011 Cactus Little League Facility Summary (as researched by Broughton/Heimstead) we believe the current facility related Sustainment, Operations and Maintenance costs may be in the regions of $3,800,000 per annum (for the following items):

Custodial
Energy
Grounds
Maintenance & Replacement
Management
Pest Control
Refuse
Security
Telecom
Water & Sewer”

What does all of this mean? Darned if I know. No, really, it demonstrates that there are two elephants in Glendale’s room. Check out this comparison. It’s down and dirty because some of the numbers can only be estimated at this point but it gives one a feel for what is happening at each facility.

Jobing.com Arena Camelback Ranch

Annual construction debt $12M approx. $25M

Average annual Capital $3.5M $1.2M

Improvement Expense Est.

(over next 5 years)

Annual Management fee $15M 0

Total average annual expense $30.5M $26.2M

AnnualEst. projected revenue – $3M -$ .3M

Annual Est. projected deficit $27.5M $25.9M

As can be seen, the deficit numbers for each facility are pretty close to one another. Yet, I cannot begin to count the number of times that someone has said, “Don’t blame the arena for Glendale’s financial problems. Take a look at Camelback Ranch. That’s the real problem.” As you can see, each is a tremendous financial burden on the city at a time when the city faces financial crisis. There are, indeed, two elephants in Glendale’s room.

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