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Joyce Clark Unfiltered

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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: , , , , , , | 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.

© Joyce Clark, 2014

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This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The 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.

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: , , , , , | 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.

© 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.

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: , , , , , , , , | 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?

© 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.

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: , , , , , , , , , , | 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. 

© 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.

          

Feb 14

7

It’s only money

Posted by Joyce Clark on February 7, 2014
Posted in City Council Actions • City issue and actions • City of Glendale • Glendale elected officials • Glendale finances  | Tagged With: , , , | 1 Comment

The February 4, 2014 morning session of the city council workshop was devoted to budget issues. Here is the link to the presentation slides used by city staff:

http://www.glendaleaz.com/Clerk/agendasandminutes/documents/BudgetWorkshop-20140204.pdf .

It was a long and complicated presentation. I am not reviewing all the minutiae of the meeting but rather let’s look at the “take-aways.”

  • Take-Away #1: Council approved staff’s recommendation that the property tax rate float. The total property tax rate prior to the Great Recession was $1.5951 in Fiscal Year11-12. In Fiscal Year12-13 it was $1.9005. In Fiscal Year13-14 it is $2.2889. Solution #1 to raising more revenue increases the total property tax rate per $100 by $0.6938.
  • Take-Away #2: Council approved making inter-fund interest rates variable based on what the city receives as a return on its investments. Council borrowed money from the landfill, water/sewer enterprise funds as well as the technology replacement fund and the vehicle replacement fund. By floating the interest rate to the rate the city makes on its investments saves the city a considerable amount of interest debt on those loans. The current interest rate is 3.62% at a cost of $1.6 million. With adoption of a variable rate the interest becomes 0.40% next year at an interest cost of $178,640. Solution #2 to raising more revenue makes the interest rate on internal loans variable.
  • Take-Away #3: Council approved a series of 5 strategies to raise further revenue. They include transferring dollars out of the total arts fund balance of $1.066 million. Several years ago Council transferred a little over $2 million out of the arts fund. So it can be done. I don’t think anyone wants to see the arts fund be dissolved and it should retain a fund balance. Another revenue raiser is to audit companies that pay sales tax revenue to the city. Clearly Mayor Weiers (pro business) was uncomfortable with this concept. Staff contends that it will raise revenue for the city but could not project how much. Staff proposed that the amount the General Fund charges departments for support, i.e., legal, financial, human resources, be increased – modestly. Staff indicated that they are still working on a city asset list of properties for sale or lease back. Staff also proposed that the temporary sales tax become permanent, that the rate be increased and that the list of taxable items be increased. Solution #3 is to get blood out of a stone.
  • Take-Away #4: These expenditure items are still in discussion and will be brought back to council but include restructuring of the city’s inter-fund loans (already done) and elimination of the sales tax paid by the city for water use on its own properties (already done). Still on the chopping block is the reduction/elimination of retiree health subsidies; alternative service delivery to citizens; and adjustment (downward) of the city’s contingency fund.

The reduction or elimination of retiree health subsides is truly unconscionable. Many retirees are on fixed, monthly incomes (Social Security) and can ill afford to see their health premiums go even higher. Perhaps if it were proposed as beginning on July 1, 2014 for new retirees who understand that they will not be subsidized and can prepare for it, it could work. Alternative Service Delivery (elimination or privatization of services) should not include the Enterprise Departments of water, sewer or sanitation. These funds are not part of the General Fund deficit for they are stand-alone and rely upon the rate payers to bear the costs of those services. A reduction of those services will have no impact on the General Fund.

The concept of the Contingency Fund is more complex. What staff proposes is to rearrange the deck chairs. Historically, in Glendale, the Contingency Fund was pegged at 10% and all or part of it could be used for unexpected expenses that arose during the course of the Fiscal Year. It remained and often grew from year to year. Staff is proposing that Contingency be set at 5% and still to be used for unanticipated expenses. It will become a renewable line item in the budget that can be made larger or smaller. Now there is introduction of a new concept, Ending Fund Balance (EDF). The EDF would be the city’s savings account for purposes of demonstrating to the bond rating agencies that Glendale has a reserve other than Contingency. Staff wants the EDF to be pegged at 25% of the General Fund Operating Budget. That is an awful lot of money to come up with instantly. Yet that is part of staff’s plan. They want Glendale, in its worst fiscal crisis ever, to turn around instantly and mimic the practices of a Triple A rated city. The idea is sound but the instant execution is not. It is warranted that it took Glendale several years to dig itself into a hole and it stands to reason that it will take several years to dig its way out. There’s an old proverb, “Rome was not built in a day.” Glendale’s financial mess will take more than a day to right itself.

© 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.

Feb 14

6

Glendale and the Super Bowl

Posted by Joyce Clark on February 6, 2014
Posted in City issue and actions • City of Glendale • Glendale and the Super Bowl • Glendale elected officials • Glendale finances  | Tagged With: , , , , , , , , | 3 Comments

It all began when the Bidwill’s and the Arizona Sports and Tourism Authority (AZSTA) couldn’t find a home for their proposed football stadium. Sites were chosen and were either rejected by the voters of certain municipalities or their city councils or rejected by AZSTA and the Bidwills. Glendale was their last, best hope to make it happen. AZSTA and the Bidwills bought the land from the Pendergast family and the Rovey family. AZSTA and the Bidwills paid for the construction of the stadium. The Bidwill’s share of costs came from an NFL loan made at an incredibly low interest rate.

It was a rocky relationship from the start between Glendale and the Bidwills, in part because the Bidwills suffer from a grandiose sense of entitlement. They demanded various zoning concessions from the city that the city did not grant. So the Bidwills’ heartburn with Glendale started with the first time the city said, “No.” AZSTA and the Bidwills seem to forget that Glendale has some “skin in the game” having ponied up $35 million for infrastructure improvements in and around the stadium.

Glendale knew when the stadium came to town that the Super Bowl was part of the package. The thinking at that time was that Glendale would host its first Super Bowl, hoping to break even. Glendale embraced its hosting duties for the 2008 Super Bowl to make it the best ever. Judging from after-event comments, that is exactly what occurred. Kudos were bestowed on all partners: The Host Committee, AZSTA, the Bidwills and Glendale. Getting to the event and parking were painless thanks to the city’s Transportation Department. The weather was perfect thanks to God. The stadium was breathtakingly new and offered boundless amenities thanks to AZSTA and the Bidwills. Related NFL parties and events went off without a hitch thanks to the Host Committee. It was an unparalleled success.

There was one fly in the ointment – Glendale, the host city, lost money. Glendale had reserved over $2 million dollars for the event and spent over $2 million dollars (probably closer to $3 million) for public safety, transportation and traffic (helicopter rentals used to monitor traffic to the NFL Experience and on game day are not cheap), and sanitation (someone had to empty those pesky garbage cans every day). Those were just some of the costs associated with hosting. Be sure to add in the countless hours of staff time planning and preparing for the event.

Why didn’t Glendale make money? There are countless reasons. Some were that the city did not have the cache of Phoenix or Scottsdale or enough commercial amenities surrounding the site to cash in on. No one can deny that the rest of the state benefitted, from the Grand Canyon to Tucson. International and national visitors came to the state a week or better before the event or stayed for some time after the event. For some visitors to Arizona, it was a once in a lifetime experience and they made the most of their time here.

Is it any wonder why Glendale suffering a fiscal crisis (sports related debt) is asking for reimbursement this time around? It’s not a strange concept. The states of Texas and Florida already have systems in place for reimbursement of host cities. The first Super Bowl hosting was a test, a pilot project for Glendale. This time around it is not. I did not vote to support the bid for the 2015 Super Bowl until there was some replacement mechanism that could recompense Glendale for its hosting expenses.

Lately many of the ill-informed media have been dumping all over Mayor Weiers and Glendale for having the temerity to ask for such a mechanism. If they know the facts, they are ignoring them. Why would anyone volunteer to lose millions of dollars? Surely they must be aware that the entire state benefits from such an event. It just makes for good talky-talky but at the expense of public misinformation.

Michael Bidwill’s trashing of Glendale makes for great news also but does a disservice to everyone. If he thinks that will help to get Glendale’s hotels to cap their rates he is sadly mistaken. Those hotels are private businesses and cannot be made by Glendale to take an action that they prefer not to do. If the NCAA Final Four does not come here, thank Michael Bidwill for poisoning the atmosphere.

Let’s not leave the NFL out of this tirade. It has been reported that the NFL will earn $9 BILLION from the 2014 Super Bowl. They pay no tax on those earnings because they enjoy non-profit status granted to them by Congress. What a joke! If nothing else the NFL can surely afford the cost of making host cities whole. But it’s all about money, isn’t it? The NFL (read the football team owners who are the NFL) is not about to give up a penny. Greed is king. I am always reminded of seeing homes (mansions) with 28 bathrooms. Yet you can only use one at a time. When is enough money enough? Never, some will say.

If the NFL will not make host cities whole and there is no state mechanism to recompense host cities (other than Texas and Florida) then perhaps it is time for the host cities to form their own coalition. I have called for such action for years. If the cities got together, put some basic cost claims forward to the NFL and stuck together, the NFL would have to accede. Where would their event go?

One final word. After weeks of hype in anticipation of a super game instead we witnessed a super dud. It was disappointing to say the very least. The score was not even close. No one can, of course, control the outcome but one hopes that the scoring will be close to make the game entertaining. 43 to 8 is not entertaining. It is a blood bath. A few of the commercials were better than the game. Over 100 million tuned in but by the time it concluded you can be sure many of them had stopped watching.

My last informal poll on the question of the former Glendale City Attorney Craig Tindall’s questionable ethical behavior had 59% saying ‘Yes” his behavior was unethical to 41% saying “No.” My latest poll is to the left of this column.

© 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.

Feb 14

5

Here come da Chief…with sound and fury

Posted by Joyce Clark on February 5, 2014
Posted in City issue and actions • City of Glendale • Glendale finances  | Tagged With: , , , , , | 1 Comment

Recently the Glendale Star ran an article about the “great fire truck mess.” Here’s the link: http://www.glendalestar.com/news/article_43959c72-8cf1-11e3-ace9-0019bb2963f4.html .

In one of my recent blogs, “Choices…so many choices,” we learned the proposal to be ratified by council was to buy a new fire truck for more money ($484K) than was granted ($424K) for the purchase and was pulled from the agenda. The reason for its removal was due to public comment offered by two gentlemen representing Freightliner of Arizona who reported on the RFP process and gave examples of why it was flawed. The City Manager, Brenda Fischer, always on top of every issue, indicated that she wanted to learn more and it would either come back to council as presented or a new RFP would be conducted. The Star reported that Fischer would be issuing a new RFP. How’s that for a demonstration of Fischer’s being on top of the very issues approved by the City Manager to go before council? She ought to be embarrassed.

However, the more interesting part of the story is what happened AFTER the council meeting. Fire Chief Mark Burdick confronted the two men, Freightliner’s Attorney Evans and Freightliner’s General Manager, Tim Noeding.

Burdick told Noeding that he was “shocked” that Noeding went public with his complaints about the RFP process and Burdick thought it was “unfair” because Noeding’s “side of the story” got out publicly first. Noeding shot back with perhaps Burdick needed to look at his people and their level of performance in handling the RFP process.

Good for Mr. Noeding. Too often the Glendale system is to try to waylay those who have a grievance, schmooze with them privately and then send them packing – all the while, they leave scratching their heads, wondering what had happened. It is a time-honored Glendale strategy used to prevent any negative from becoming public.

It raises some rather interesting questions, however. Who is running the Glendale Fire Department? The Fire Chief or the Fire Union? For many years it was John Holland, President of the Glendale chapter of the Fire Union. He was the power broker and if anyone wanted anything done they went to him. Alas, Holland was under investigation after having been caught with his hand in the Union cookie jar. Strangely, but not unexpectedly, nothing ever came of that investigation. It seems to have been buried deep within the bowels of the Union, never to surface again after Holland went quietly into the night. Others have assumed Holland’s mantle and may have just as much power.

In one of my many conversations had with the Fire Chief over the years, when questioned about certain policies and practices, he would shrug and refer to some concession the Union had been granted that allowed the policy or practice.

In some ways Chief Burdick’s hands are tied, especially in his efforts to control the fire department budget. It has become more and more difficult as the Union continues to stave off questions about overtime, the use of 4-man trucks or the use of big, expensive trucks answering medical calls which make up nearly 80% of the department’s Calls for Service. If those are sacred cows then Burdick must get a handle on his departmental budget and make cuts in other areas. It’s time for Burdick to manage more effectively and just like the City Manager, be knowledgeable about his employees’ decisions and actions. He and the City Manager should not be the last to know but rather the very first to know.

In other news, congratulations to Jerry McCoy on his promotion to Executive Director of Communications and Marketing. It is well earned and well deserved. But wait, you say, isn’t that Julie Frisoni’s position? Well, yes it is but apparently not any longer. It’s the signal that Fischer is about to make Frisoni permanent as Assistant City Manager, despite the fact that Frisoni does not meet Human Resources defined qualifications for the position.  But that’s just a minor roadblock. Fischer can certainly order Jim Brown, Executive Director of Human Resources, to change or modify the qualifications for the position. Hmmm…I thought the City was removing all those pesky Executive Director titles. Keep in mind, Frisoni was part of the former City Manager Ed Beasley’s “inner circle.” She knows where all the bodies are buried and may have even helped to bury some. Yet when faced with ethical issues such as former City Attorney Craig Tindall’s alleged email solicitation on a city computer for tax deductible tuition donations for his son she said nary a word. What exactly are her ethical standards? After all, she probably advised Beasley on how to handle the Alma Carmichael debacle when it became public knowledge.

I haven’t even commented on the February 4, 2013 city council budget workshop or regular workshop yet. It will just have to wait for the next edition of the blog. Burdick’s show of outrage was just too good to pass up.

© 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.

Jan 14

31

Heard around the water cooler…another edition

Posted by Joyce Clark on January 31, 2014
Posted in City issue and actions • City of Glendale • Glendale and the Super Bowl • Glendale finances  | Tagged With: , , , , | 1 Comment

Every once in awhile I collect all of the rumors and speculation and offer them to you, the readers, as such.

It appears that public safety union representatives may have briefed their rank and file to the possibility that Glendale could declare bankruptcy within 18 months. Add to that City Manager Brenda Fischer may have raised the same prospect to employees a few months ago. Looks like everyone within the organization has been forewarned of it as a possibility. Everyone has been told but you, the Glendale taxpayer. Which begs the question: Why the rush to make the temporary sales tax permanent and possibly raise it if it will not stave off a possible bankruptcy declaration?

Also heard around the water cooler is council learned – for the first time — a few months ago when they requested information from staff on assets that could be refinanced, sold or leased, that former City Manager Ed Beasley had already done a lease back for the Public Training Facility. So strike the Public Safety Training Facility as a candidate for refinancing of its debt. As we are all finding out there was a lot that Beasley did not share with city council or the public. This appears to be another in a long list of omissions by Beasley. It also appears that the current council and senior management are not above keeping secrets as well.

Several asked regarding the Tindall blog, “Friday is supposed to be a slow news day…” and it is a fair question to ask: If Frisoni and Burdick were recipients of the infamous Tindall “informational” email about state tuition tax credits for schools, why did they not report the email upon receipt? Tindall used city email for what was evidently a personal purpose. Wouldn’t it have been incumbent upon them to report the violation? Why didn’t they? Was it because they were reluctant to turn in one of their buddies?

The Arizona Republic presented a timeline surrounding Tindall’s activities. Here is the link: http://www.azcentral.com/community/glendale/articles/20140130glendale-city-attorney-email-timeline.html . It puts events in context and so it is offered here:

  • Jan. 23, 2013 — Then-City Attorney Tindall uses city e-mail to ask at least 40 people to contribute to his son’s private-school tuition.
  • March 26 — Glendale City Council formally selects the law firm Haralson, Miller, Pitt, Feldman & McAnally CQ to head an extensive audit of possible wrongdoing by city employees. Attorney Jose de Jesus Rivera, CQ who was one of the people Tindall e-mailed, leads the project.
  • April 1 — Tindall officially resigns as city attorney, with the provision that he receive full pay for six months for working up to five hours every pay period.
  • May 28 — National Hockey League executives announce Canadian businessmen George Gosbee and Anthony LeBlanc’s investment group as the preferred buyer for the Phoenix Coyotes.
  • July 2 — The City Council agrees to pay Gosbee and LeBlanc’s group $225million over 15 years to manage Jobing.com Arena.
  • July 30 —The Phoenix law firm Fennemore Craig announces that it has hired Tindall.
  • Aug. 5 — The NHL completes the sale of the Coyotes to Gosbee and LeBlanc’s group, IceArizona.
  • Aug. 20 — Tindall begins work as the Coyotes’ general counsel.
  • Aug. 21 — Glendale releases Rivera’s audit, which identifies several employees involved in wrongdoing, but spares Tindall.
  • Sept. 3 — Glendale hires former Peoria City Attorney Michael Bailey, who received Tindall’s e-mail on Jan. 23, to succeed Tindall as Glendale’s city attorney.
  • Oct. 1 — Tindall’s employment with Glendale officially ends.
  • Nov. 26 — Former City Councilman Phil Lieberman asks the state Bar to investigate Tindall for possible violations of ethics rules.
  • Dec. 20, 2013 — The Bar notifies Lieberman that it has launched an investigation.

Did you know Michael Bidwill is deliberately trashing Glendale? He thinks Glendale is “selfish” when it comes to hosting the Super Bowl. Why? Because the city hasn’t forced all Glendale hotels to join the NFL agreement to cap room rates. Really? What does he want Glendale to do? Hold a gun to hotel managers’ heads and say, “Join or else?” He knows that Glendale can ask and suggest but cannot make private companies bow to the will of the NFL. It must be embarrassing to him in front of other owners and execs in the NFL that he does not control everything but to trash the city for it is beyond ludicrous. I think we can assume that he is part of the reason that Glendale is not hosting any Super Bowl events. If he is trash talking Glendale publicly, my goodness, can you imagine what he is saying privately?

There’s more that comes across the transom but that’s enough for you to chew on for now. Try to enjoy your weekend!

© 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.

Jan 14

30

Choices…so many choices

Posted by Joyce Clark on January 30, 2014
Posted in City Council Actions • City issue and actions • City of Glendale • Glendale elected officials • Glendale finances  | Tagged With: , , , , , , , | 7 Comments

Tuesday, January 28, 2014 was the regular city council meeting…and I had choices, so many choices. Go to a Coyotes game vs. the LA Kings, watch the President’s State of the Union speech or watch the Glendale city council meeting. Hands down, no doubt about my choice. I chose to go to the game and what a game it was! It was the Coyotes of old. They played with consistency, passion and fire. They couldn’t help but win, 3-0, with that kind of play. It reminded me of the very first games I attended several years ago. I hope the Coyotes are back.

The council meeting had two hot topics: the purchase of a fire truck and the move to move public comment to the end of the meeting and limit speech from 5 minutes to 3 minutes.

The fire truck issue arose when Andy Evans, an attorney for Frank Leonard, owner of the country’s second largest vendor, spoke during Public Comment. Both gentlemen alleged that the city’s procurement process was flawed and that different specifications were provided to different vendors. The budget for the new fire truck was $425K yet the final purchase rose to $486K. Hmmm…something is rotten in Denmark. Did fire make sure a crony received the contract? City Manager Brenda Fischer pulled the item from the agenda and said she had questions. Based upon the information provided to her she would either bring the item back or start over. As City Manager she should have had information about this item and should have been prepared to share it with council.  At the very least she should have received the necessary information through a Fire Department Memorandum. Who is in charge?

The item that drew extensive comment was item #11 which would change the public comment to the end of the meeting and limit speaking time. The usual suspects spoke against the proposal: Ken Jones, Gary Livingston and the Marwicks. What was truly eye popping was Andrew Marwick’s attempt to explain why they reside in Phoenix yet speak at Glendale council meetings. Marwick’s premise was he had once lived in a city similar to Glendale with the same kinds of issues and that he was merely sharing the benefit of his knowledge from that previous situation with Glendale. His attempt to explain himself resulted in a rambling dissertation which was brought back to earth by the Mayor’s and the City Attorney’s admonishment to speak to the agenda item. If nothing else and I assure you there is nothing else…the Marwicks have a lot of chutzpah.

Whether Public Comment is at the start or at the end of the Council meeting is not a critical issue. Glendale has always invited public comment and televised it as well. Council has always listened respectfully to citizen comment…some more respectfully than others. The former Mayor Scruggs would roll her eyes and purse her lips, virtually sneer, when she disliked or disagreed with the comments being offered.

What should be of concern is this council’s move to limit free speech by cutting public comment from 5 minutes to 3 minutes. Not everyone is a polished speaker and should be allowed the time some need to get to their point. The only occasions when speaker time has ever been an issue in the past were related to discussions of Coyotes’ ownership deals over the years. The truncating of speaker time to 2 or 3 minutes made sense on those occasions especially when the comments were repetitious. Mayor Weiers made a good point when he said the mike and TV were very powerful…and they are. They provide citizens with an opportunity to gain a wider audience for their point of view.

Councilmembers Knaack, Martinez and Sherwood all expressed the general opinion that they were not taking anything away from the right to public comment while ignoring the fact that they were indeed LIMITING free speech. Weiers and Alvarez defended the current practice. Weiers said he would give speakers 10 minutes each if he could and Alvarez said there was a sense of a “power play” taking place. Councilmembers Hugh and Chavira were silent on the issue. The votes were done by roll call at the request of the Mayor. Councilmembers Sherwood, Knaack, Martinez and Chavira voted for moving public comment to the end of the meeting and limiting speech to 3 minutes. Mayor Weiers and Councilmembers Hugh and Alvarez voted to keep the practice. It is very difficult to put the genie back in the box after it has been freed. The four councilmembers who voted to do so, Sherwood, Knaack, Martinez and Chavira, could find that this move comes back to bite them.  However, with Martinez’ and Knaack’s retirement, it may only be an election issue for Sherwood and Chavira.

Item #21 was the affirmation of Vice Mayor Knaack to continue for another year as Vice Mayor. As expected Alvarez was the only “no” vote.

During the Council Comments which occurs at the end of the meeting Vice Mayor Knaack used her opportunity to try to rationalize her public comment about the sales tax increase when she said that the sunset provision was adopted to “make it more palatable to residents.” It demonstrates a very cynical attitude. I was the councilmember who offered and succeeded in getting the sunset provision adopted because I fully anticipated that council would adopt budgetary cuts in expenses every year leading up to the sunset. A budgetary cut plan was proposed by former Interim City Manager Horatio Skeete and I expected council to follow through. If council had followed through as proposed, by reducing the budget by several million dollars each and every year, this council would not be taking such radical steps this year. If some councilmembers such as Knaack accepted the sunset provision to make it more palatable to voters they might have been better served to voice their concerns about the provision at the time. Instead it was accepted with nary a comment. This is a major issue and council’s decision to make the sales tax increase permanent by removing the sunset clause with a simple council vote and their intent to raise the sales tax increase is a not right. It is a major violation of public trust.

Last up was Mayor Weiers who admitted that he had not done a good job working with his peers, councilmembers. He said he was working to rectify the situation by meeting with them one on one to find ways to help them to succeed. Good for him. It’s a practice long overdue. God knows it was never an agenda item for former Mayor Scruggs who believed in keeping all power to herself.

Reminder the next City Council Budget workshop is Tuesday, February 4, 2014 at 9 AM to be followed with a regular council workshop at 1:30 PM on the same day.

My informal poll to the right of this column becomes even more relevant as council continues to shape next Fiscal Year’s budget. Also take the opportunity to sign up for email notices of upcoming additions to my blog. It is to the right of this column.

© 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.

Jan 14

25

Take a deep breath and wait

Posted by Joyce Clark on January 25, 2014
Posted in City issue and actions • City of Glendale • Glendale finances • Jobing.com arena  | Tagged With: , , , , , | 3 Comments

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

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

  Fund ID     Amount  
Arena Event Operations

$247,457.06
Arena Special Revenue

$1,947,103.03
   
Account

Amount
Arena Annual   Rent

$326,712.33
Arena Base Team   Fees

$48,681.51
Arena Naming   Right Revenue

$60,000.00
Arena Parking   Fees

$18,835.49
Arena Parking   Rev-Hockey Games

$309,898.94
Arena Parking   Rev-NonHockey

$91,719.49
Arena Ticket   Surchg-Hockey

$896,393.39
Arena Ticket   Surchg-NonHockey

$194,861.88

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

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

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

Under a generous scenario it looks like this:

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

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

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

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

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

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

© Joyce Clark, 2014

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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