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Joyce Clark Unfiltered

For "the rest of the story"

Apr 13

1

Who will be the gorilla?

Posted by Joyce Clark on April 1, 2013
Posted in City of Glendale • Glendale finances  | Tagged With: , , , | 1 Comment

budget 3The Glendale City Council typically meets in workshop session every two weeks on a Tuesday afternoon at 1:30PM. It is also televised on Glendale’s Channel 11, which only works if you have Cox cable service and live in Glendale. It is also available online at www.glendaleaz.com.

coins 1This is the busiest time of year for any city council as it decides where to allocate resources (revenues) for the coming year. Money in local government is power and each department fights to retain or grow its part of the pie(chart). It will be interesting to see who the gorillas are this year.

What can we expect this Tuesday? Several important items are up for discussion, some of which will be discussed inman money open session and some of which will be discussed in the non-public, executive session. First up in the open session will be the periodic legislative update. There should be discussion (I would hope) on the state’s attempt to take away cities’ construction sales tax. This issue is huge and if the state prevails, look for every city (including Glendale) to try to find ways to mitigate this loss which could be substantial.

firefighterNext up will be Council Items of Special Interest on the Police and Fire budgets. Making it to a workshopPoliceman agenda is interesting in and of itself. Last week Councilmember Chavira called for such a discussion and his suggestion met with deafening silence by the rest of Council. Yet here we are, a week later, and it has made its way to a workshop. Even more curious, at the previous council’s January 8, 2013 meeting, it was scheduled to vote approval to take actions to balance both department budgets. Instead a motion was made and approved by a majority of council (I was not one) to place all actions on hold until the appointment of a permanent city manager. There is no permanent city manager…yet…but like an unruly stepchild, the issue is before the new council. Hmmmm…

Then there are the six items listed on the council’s executive session agenda. Three of them are hot topics. One is consultation with the newly hired external auditor with a price tag of $200,000; another is that council is to give the contractCity Manager and City Attorney direction regarding arena management (don’t forget Beacon Sports’ fee of $100,000) and the Coyotes; and the last of the trio is to resolve the compensation package for the former City Attorney and I assume, the Acting City Attorney as well. The first two items deal with contracts and the third with personnel. All, unfortunately, are legitimate topics of private discussion.

It would be extraordinary if council resolved the Coyotes issue in Esession but, the NHL will first sell the team to whomever and then the council will decide if the Coyotes stay or go when it makes its decision about the arena management contract. Don’t expect any news on the Coyotes issue from Glendale today or anytime in the very near future.

On Monday, April 1, the city will host its first of two community meetings on the city budget. I plan to go and learn the “media line” that will be used to sell it to the community this year.

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Mar 13

27

Budget Class…day one

Posted by Joyce Clark on March 27, 2013
Posted in City Council Actions • City of Glendale • Glendale elected officials • Glendale finances  | Tagged With: , , , , | 2 Comments

man moneyThere were several take-aways from the March 27, 2013 Glendale City Council budget workshop. Perhaps the most important was the Executive Director of Finance, Ms. Sherry Schurhammer’s quote of the day, “we have an ongoing operational deficit.” I’m not sure what about that statement some councilmembers refuse to understand. It’s really quite simple. The city spends more money than it takes in.  It’s almost as if members of this council expect manna from heaven or a sugar daddy to appear as a means of solving the city’s financial problems. Let’s hope this council grows a backbone and accepts that cost of service cuts are needed. The latest proposal from staff shows major cuts of $8M not now but in Fiscal Year 2014-15 and another round of cuts in Fiscal Year 2016-17. Quite clearly putting off the necessary cuts merely compounds the deficit and makes the future cuts to citizen services and quality of life more drastic and more painful.

Coyotes logoAnother interesting take away is the fact that staff is using $6M as a placeholder for an arena lease management fee. At least there was acknowledgement that this figure is merely a place holder. The final fee could be higher, lower or stay the same.  Or is that a place holder for the Phoenix Monarch Group, the good friends of Councilmembers Alvarez and Chavira? There remains a residual “blame the Coyotes” mentality. The first slide up presented by staff showed the city with a $3.4M deficit if it had had to pay the $17M arena lease management fee this year. I think that deficit blame deserves to be placed elsewhere. How about the $2.5M to repay the Water & Sewer Funds, and also used to make the Risk Management Fund and the Workman’s Compensation Fund whole? Or how about the $2.2M of newly created expenses: a $200K audit, a $100K Beacon contract, $1.2M additional to the Fire Department; an additional $370K in legal fees, an additional $370K in water costs in the Parks & Recreation Department or the unknown amount in salary and benefits for the newly hired Interim City Manager? These big ticket items come to nearly $5M in new costs that were unbudgeted when the current budget was approved and they will have to be absorbed this year.

hidden agendaAnother take away is there is certainly no doubt about at least one councilmember’s agenda. CM Chavira is “carrying the water for Public Safety.” It was obvious that his friends from inside those departments, especially Fire (don’t forget he’s a Phoenix firefighter), had prepared a series of questions for him to ask.  He read them quite nicely. Later when he was asked if he had more questions and apparently had used all of his prepared questions, he seemed to be at a loss for words. Chances are they will have prepared a new set of questions for him to read at the April 2, 2013 council workshop on Public Safety.

PolicemanWhile Interim Police Chief Black answered his questions directly and provided a realistic assessment based upon the city’s current fiscal condition, we didn’t see the same level of cooperation from Fire Chief Burdick. There definitely is a further agenda occurring on the Fire side. We heard the first salvo today when the Chief said calls for service had grown. Well, Glendale’s population has not grown per Mr. Craig Johnson, Director of Water Services, when he said new water hookups are flat. Those people leaving Glendale are replaced by others moving in but not in large enough numbers to create an explosion of growth in Glendale. The city is already planning for the fact that as Glendale’s population remains static, it will lose some of its state shared revenue to other, growing NW and W Valley cities.

Red Firetruck with Ladder ClipartSo where are the increased calls for fire/emergency service coming from? Have you heard of Automatic Aid? It’s a regional and cooperative program among most Valley Fire departments. If there is a call for fire service in Phoenix, Avondale, etc., and their nearest truck is busy on another call, the nearest adjoining city department will respond. I would certainly want to know the number of calls for fire service Glendale responds to outside the city versus the number of calls for service within the city. The increase in calls for fire service may well be attributable to population growth in cities surrounding Glendale.  If that is the case and the increase in calls is the result of an increased need to respond to Automatic Aid calls that is not a Glendale driven problem. We are not mandated to grow service or pay for it in Glendale to accommodate surrounding cities. While Automatic Aid is great in fostering regional cooperation in cases of extreme regional emergencies and for creating cost efficiencies in the use of specialized services such as water or mountain rescue, I am not convinced that it works in the best interest of a city with a stable population base whose resources are being used by surrounding cities with burgeoning populations.

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Mar 13

26

Just..nothing

Posted by Joyce Clark on March 26, 2013
Posted in City Council Actions • City of Glendale • Glendale elected officials  | Tagged With: , , , , | 3 Comments

city hall 2

City Hall

On Tuesday, March 26, the Glendale City Council met in regular session. There were 29 agenda items. Based on previous meetings that I attended as a council member that is a pretty hefty agenda. Lo and behold! This council whipped through it in the record time of one hour! One could assume that it was because of their extreme efficiency but that would be an erroneous assumption. This is a council that questions nothing and comments even less. My first question would be, did any of them do their homework and actually read the material?

Coalition 1 photo

City Council minus
Councilwoman Alvarez

For example, Item 20 was an agreement to rebuild two refuse trucks. Not sexy at all. But one replacement truck costs about $500K. For half that price, roughly $250K two trucks are being rebuilt. This is an action never before taken by our Public Works department. You would think some on council would have thanked Mr. Stuart Kent, Executive Director of Public Works, for taking this proactive and innovative approach to city equipment, saving the city easily a half million dollars. Not a peep from this council. Just…nothing. Amazing.

westgate 1There was approval of an agreement with the current Westgate owners for sidewalks, shade canopies, etc. between Tanger Outlet and the rest of Westgate. No one on council took the time to thank the owners for their efforts and financial participation in this public-private partnership. No one asked about implementation of a “HAWK” system for pedestrians trying to cross 95th Avenue to get to Westgate. There is a “HAWK” in use on Glendale Avenue at about 66th Avenue. It allows the pedestrian to push a button which causes a yellow light to flash followed by a red light to stop all vehicular traffic. It allows the pedestrian to cross a busy street safely by stopping all vehicular traffic in both directions. Wouldn’t this be a wonderful addition to move pedestrian traffic between Tanger and the rest of Westgate? Before I left council I was advocating such a strategy. Sadly, no one took up the cause.

There were four items that you would think would have engendered at least minimal questioning or comment.  Two were awards of contracts. One was Item #16 to Haralson, Miller, Pitt, Feldman & McAnally in the amount of $200,000 for an external city audit and the other was Item #21 to Beacon Sports in the amount of $100,000 for issuance of an RFP and handling of negotiations with possible arena managers. There was not one question. There was not one comment. There was no discussion whatsoever. Could ‘a been a day in the park. Not one word to the general public about either contract’s terms, scope, time frame, or justification for cost. Just…nothing.

Skeete

Horatio Skeete

Bowers

Dick Bowers

The other two items were just as astounding.  Item #26 was termination of Horatio Skeete as Interim City Manager and demotion back to Assistant City Manager. Not a “thank you.” Not a word of recognition for the good things he had done for the city. Not even a comment from Mayor Weiers saying “that council was moving in a new direction.” Just…nothing. In the next action, Item #27, council appointed Dick Bowers as Interim City Manager. Not a word about his background, expertise or experience. Just…nothing. Item #28 was tabled by staff and signals that council has not come to terms with Mr. Tindall on what he will receive financially upon his termination. That did not slow up this council for one minute as they approved Nick Dipiazza as Interim City Attorney in Item #29. Just…nothing.

Norma Alvarez

Norma Alvarez

Once again Councilmember Alvarez was AWOL. How many times has it been? Also worth noting (and I may have missed it as I watched dumbfounded by this council) was the lack of a vote by council to approve her absence.  Did she not want to be on record as a yea or nay vote on the Beacon Sports contract or has she injured herself again? For the third or fourth time? Her lack of representation of the interests of ALL (not just a selected demographic) of the people of her district is being noted by many.

Weiers

Mayor Weiers

Mayor Weiers “good ole boy” public persona is beginning to wear thin as he fancies himself a “deal maker” behind the scenes. Latest word on the street with regard to Coyotes ownership is that nobody is in charge (except for Beacon Sports as of today for a $100,000 fee). Possible owners are speaking directly to various councilmembers to encourage them to champion their proposal. What a way to set up internal warfare.

Of course, the carpetbaggers, Andrew and Darcy Marwick, residents of Phoenix were in attendance. Some people (not I) refer to them as “Dumb and Dumber.” Mr. Marwick took the occasion of approval of the agreement with the Westgate owners to once again denigrate the actions of the previous council in “propping up” a failed Westgate. I would imagine he could opine on any subject (as he often does) and claim its failure is due to the previous council.

Lastly, when was the last time there was no citizen comment at the end of a council meeting? I would venture to say,convention 2 probably 4 years. If the past council had voted to approve the Beacon Sports contract, I dare say Ken Jones and half dozen others would have been railing against such a vote. No Jones, no Thruston, no Dempskey- no usual cast of wacky characters- to accuse this council of throwing good money after bad by approving Beacon Sports. This time just…nothing.

transparentThe new buzz word in government is “transparency.” We all know what it means; the ability to see through something without any kind of blockage. Transparency has to do with disclosure. It means providing information about an issue, event, project, policy, program etc. and then providing a way for people to find and view that information. This council proved tonight that transparency is not a meaningful part of its agenda.

I prefer to call this council, the “Opaque Council” (The OC). Something is opaque when you cannot see through it. Theopaque action is characterized as hard to understand because it is not clear or is obscured by the deliberate misuse of language or inaction. It also has a secondary meaning, which is being dull, stupid or unintelligent. I leave it to you, dear reader, to choose which definition of opaque is more relevant and meaningful to you.

 

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Mar 13

25

What are they up to now?

Posted by Joyce Clark on March 25, 2013
Posted in Blogs • City Council Actions • City of Glendale • Glendale elected officials • Glendale finances  | Tagged With: , , , , | No Comments yet, please leave one

External Audit coming…

auditAt the Tuesday, March 26, 2013 City Council meeting an agenda item will be a vote of approval to hire Haralson, Miller, Pitt, Feldman & McAnally (HMPM), P.I.C., a law firm, to perform the special external audit this council has been craving. It doesn’t come cheap. The cost of this contract is $200,000. HMPM will subcontract out some of the work to Butler, FFG, and ESI. It is not clear from the staff report what would be the scope or responsibility of any of these firms. It is also not clear what their specialties are.

The costs per hour range from a high of $400.00 per hour for a principal to $100.00 per hour for a paralegal/law clerk.  Simple math shows that the number of hours billable for this contract range from 500 hours (about 12 ½ weeks) to 2,000 hours (about 50 weeks). This exercise could be completed in 3 months to a year. I think we can expect it to be completed this summer.

This is not a budgeted item and is not included in the current Fiscal Year 2012-13 adopted budget. That means that the money will have to be allocated from somewhere in the budget. Look for the payment of this contract to come from the $17M set aside for an arena lease management agreement. By the time this council’s agenda is met we won’t see much of the $17M left to pay anyone to manage the arena.

Bowers

Dick Bowers
Courtesy of
Linked In

A new Acting City Manager…

Expect at this same council meeting the hiring of Mr. Richard Bowers, former Scottsdale City Manager, as Glendale’s Interim City Manager until the search and hiring of a permanent city manager is completed.

A new Acting City Attorney…

Expect the council to approve Mr. Nick Depiazza, current Chief Deputy City Attorney, as the Interim City Attorney, until a permanent City Attorney is found and hired.

Budget meetings slated for this coming week…

On Wednesday, March 27, 2013 and Thursday, March 28, 2013, council will participate in two budget workshopsbudget 3 starting at 9am each day. This year’s budget workshop book is a hefty 284 pages of reading guaranteed to entertain and delight. Just crank up your printer, go to the Glendale website, find the agendas under the City Clerk’s page and you can print your very own copy just as I did. If you know where to look you will be able to spot the shifts in policy based upon where this council allocates available resources.

coins 1Still looming is how this council will address the loss of $22M in revenue currently being earned by the sales tax increase slated to sunset in 2017. The general feeling among council is that the city will have recovered by then and will easily absorb the $22M loss in sales tax revenue. There appears to be no will to be fiscally prudent and continue with cuts in anticipation of that loss of revenue. If they do not have the will to make gradual cuts each year for the next four years, they will be forced by circumstance to make draconian cuts in 2017. It’s very simple; karma catches up to you every time.

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Mar 13

22

The Beacon contract finally sees the light of day

Posted by Joyce Clark on March 22, 2013
Posted in City of Glendale • Glendale elected officials • Jobing.com arena  | Tagged With: , | 1 Comment

Today the city released as an agenda item for Tuesday, March 26, 2013 city council meeting. The council will be asked tocity hall 2 formally ratify a contract with Beacon Sports Capital Partners that has apparently been in effect since March 4, 2013. In fact, the City’s Communications Director, Julie Frisoni, denied as late as March 15, 2013, that there was any such contract.  An action George Fallar and I have speculated upon for the past month.

I suspect that the contract was vetted in a previous Executive session after a council workshop. Keep in mind, council may not vote in a workshop or Executive session but they can certainly come to consensus and give direction. When I served on council, a majority routinely gave direction in an Executive session. The council meeting on March 26 merely ratifies direction provided as a previous executive session. So much for a greater transparency embraced verbally by the new council and recently lamented as absent by the infamous Ken Jones in recent letter to the editor in the Glendale Star. The bloom may be off the rose for Mr. Jones and his love affair with the new council.

BeaconThe Beacon contract is short and sweet and takes only 4 pages. Glendale tasks Beacon with developing an RFP “process for the future lease and management of the Arena to prospective Venue Managers…” Its role is that of liaison for Glendale and it has no power to bind Glendale to any contract. Its duties consist of: reviewing all existing business contracts; preparing the RFP; soliciting interested parties and assisting them in their due diligence and review process; providing a recommendation to the city manager and council; developing the arena management agreement and sealing the deal between the venue manager and the city. We have to presume that the NHL approves of such an arrangement as they continue their silence (there is an occasional platitude signifying nothing).

This contract is in effect for 6 months (September 6, 2013) or if a venue manager is secured before the end of the statedcontract term, it will terminate earlier. When this agreement is ratified by council, presumably on March 26, Beacon will receive a $25,000 retainer. In addition to that retainer the city will pay $400 per hour for the services of 3 Beacon principals: Richard Billings, Jr., Gerald Sheehan and Christopher Billings. Oh, and by the way, these fine gentlemen will be reimbursed for any out-of-pocket expenses such as travel, lodging and meal expenses. The costs of this contract are not budgeted in the Fiscal Year 2012-13 budget. The funds will have to come from the “Unappropriated Contingency” Fund (read the $17M allocated in this year’s budget to pay for an arena manager).  Lastly, both sides in the contract recognize that this agreement is proprietary and confidential.

In a previous blog, “Ripples in a cornfield,” I related that a 2005 suit was filed against Beacon Sports, IFG and Michael Reinsdorf by West Coast Arena Ventures, LLC in the Superior Court of California. West Coast Arena Ventures sued because it alleged that its confidentiality was breached by Beacon, IFG and Michael Reinsdorf. I do not know the outcome of this suit.  It has been alleged previously that when IFG and Michael Reinsdorf had work they could not or chose not to take they passed it on to Beacon. A leopard doesn’t change its spots.leopard 2 It may very well come to pass that the Reinsdorf/Kaites group will have an inside track because of its relationship, perceived or real, to Beacon Sports.

The previous Reinsdorf deal for the purchase of the Coyotes insisted there be a 5 year opt-out clause. If they hold to the same line, the Coyotes could stay for an abbreviated period and then be moved to…Seattle?

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Mar 13

22

Goldwater Institute: You may do what it says but not what it does

Posted by Joyce Clark on March 22, 2013
Posted in Blogs • City of Glendale • Glendale finances • Jobing.com arena  | Tagged With: , , , , | 5 Comments

GoldwaterBuilding

Courtesy of
Goldwater Institute

On March 14, 2013 the Center for Media and Democracy in conjunction with Arizona Working Families issued A Reporter’s Guide to the Goldwater Institute: What Citizens, Policymakers and Reporters Should Know. It can be found at this site:  http://www.prwatch.org/news/2013/03/12021/reporters-guide-goldwater-institute.

While I was serving on Glendale’s city council there were several lawsuits filed by the Goldwater Institute (GWI) against the city. The first dated back to June of 2009 and contended that the city was refusing to release documents relating to its negotiations with various entities wishing to purchase the Coyotes and to secure a lease management agreement. GWI felt every scrap of paper should be a public document. The final agreement was that the city would release all documents it felt would not harm its negotiating position and if that should be the case, a judge, in camera, would review them and make a final decision.

Then about two years later, in March of 2011, Goldwater having reviewed more than 1,000 of the city’s documents as a result of the previous court decision, filed suit to subvert the Hulsizer deal to buy the Coyotes. It contended that the city was offering a subsidy in violation of Arizona’s Gift Clause statute. There was never a decision in this case as the city and Hulsizer could not finalize a deal.

When this report was issued I was eager to read its findings. I suspect that the practices of GWI are not so different from other public policy non-profits whether they are liberal or conservative. These types of non-profits are often shielded by federal government regulations making it difficult to obtain a complete and accurate picture of their financial dealings.

I find that to be ironic. The same organization that sued the City of Glendale for a lack of transparency is habitually not so transparent itself. It seems they don’t mind letting the public know about some, not all, of their sources of funding but they certainly don’t want you to know too much about how they get their money or spend it.

Another irony is GWI’s persistent attack on only one sport venue in the state – Glendale’s Jobing.com Arena and its use by the Coyotes. Lord knows, there have been sweetheart deals aplenty with other sports venues. Yet Goldwater never raised an eyebrow. I have often wondered if the close relationship of some board members with the baseball industry was a motivator. Perhaps, in the minds of some, there are too many sports teams all competing for the same public discretionary dollar. Taking out a major sports team could benefit the remaining teams. When a team is weak, as the Coyotes have been for multiple years, that makes it a perfect target for elimination.

Briefly the findings of this report do highlight some questionable practices:

  •  The Goldwater Institute is a member of the American Legislative Exchange Council (ALEC). ALEC is funded by corporations and its sole purpose is to craft and advocate for bills favorable to big business interests exclusively. The relationship between these two organizations appears to be very, very close. Often the very issues that GWI is advocating for coincidentally happen to be part of ALEC’s agenda.
Darcy Olsen 2

Darcy Olsen
Courtesy of
Goldwater Institute

Clint-Bolick

Clint Bolick
Courtesy of
Goldwater Institute

  • Despite a very modest growth in GWI’s income it substantially raised its top executive’s salaries disproportionately to that growth in revenue. Darcy Olson’s Executive Director salary jumped from $180,000 to $268,000 by 2011; Clink Bolick’s Director of Litigation salary went from $126,000 in 2007 to $300,000 by 2011.

 

  • Up to $1.9M has been approved as a loan by the GWI board to one of its board members, Norman McClelland, a GWI founder and past president, for his private, for-profit company, Shamrock Farm Co Investing.
  • Goldwater claimed to the IRS in 2010 that it spent $0 on grassroots or direct lobbying. Yet is has two registered lobbyists, Starlee Rhoades, Vice President, and Lucy Caldwell, Communications Director. Gallagher & Kennedy, a Public Affairs firm, is representing GWI as an active lobbyist this year.
  • GWI does not publicly disclose its largest donors, although most public policy non-profits do.  A majority of GWI’s funding comes from and  its largest donors happen to be out-of-state foundations with specialized agendas.
Barry Goldwater

Barry Goldwater

Barry Goldwater  became the Institute’s namesake. Recently Susan Goldwater expressed public concerns in the media about the GWI by saying, “(W)hat he didn’t like was seeing it turn into a special interest, big-business lobbying group.” I suspect Barry Goldwater is rolling in his grave as he sees what the Institute has morphed into.

Perhaps this “big-business lobbying group” should add as an agenda item how it can advance the cause of big-business sports teams and their venues. After all, according to GWI, all big-business is good business.

 

 

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Mar 13

20

Rumor of Day Two

Posted by Joyce Clark on March 20, 2013
Posted in Blogs • City of Glendale  | Tagged With: , , , , | 5 Comments

Skeete

Horatio Skeete

Yesterday I related sources who indicated that Interim City Manager Horatio Skeete would be resigning. Today I received more accurate information and that is that while Mr. Skeete will no longer be Interim City Manager he will stay with the organization and resume his role as Assistant City Manager.

Who will be the new Interim City Manager? Only the shadow…er, the city council knows…and maybe they haven’t made up their minds yet. So I will throw my speculation into the confusion that exists right now. I question 3would not choose anyone from inside the current organization.  I would hope that this council will not do so either. For them, it’s a case of paranoia. I don’t think they trust anyone inside the organization to provide them with their perceived and long-awaited version of the truth on any subject. It has been rumored for quite some time that this council would do major house cleaning of upper management. There has even been talk of offering a vastly different compensation package to anyone willing to step into this mess and take on the role of permanent City Manager. Expect internal warfare over the final selection of a new City Manager. Let’s hope that once that person is chosen, they can forget their differences and solidify around the selection.

I would choose someone from outside because it would help to foster an atmosphere of impartiality and remove the necessity of taking sides within the organization.

confusion 2Looking outside I don’t see a lot of choices with City Manager experience. I would consider Dr. Martin Vanacour or Richard Bowers.  Dr. Vanacour was Assistant City Manager of Glendale from 1970 to 1985 and then its City Manager from 1985 to 2002. He is experienced, knowledgeable, and certainly well versed in Glendale issues. Since his departure from the city he has been consulting and teaching. Another very viable candidate is Mr. Bowers. He was Assistant City Manager in Scottsdale from 1981 to 1991 and then its City Manager from 1991 to 2000. He has performed various consulting jobs for the past and present council. He, too, has been consulting and teaching.

The City of Glendale would be well served to have either one of these gentlemen as its Interim City Manager for several months until a permanent person is chosen for the position  Either one would bring stability and a sense of impartiality to an otherwise chaotic city management group.

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Mar 13

19

An addendum to “Saving grace”

Posted by Joyce Clark on March 19, 2013
Posted in Blogs • City of Glendale • Glendale elected officials • Glendale finances • Jobing.com arena  | Tagged With: , , , , , | 2 Comments

savingsIn my posting the other day, “Saving grace,” I talked about the $17M allocated and reserved in Glendale’s Fiscal Year 2013-14 Budget for Jobing.com Arena’s lease management agreement. I suggested that saving that $17M would be prudent by placing it in the city’s Unappropriated Contingency Fund. It should not be spent at this time. Then should there be a lease management agreement the first year’s funding would be available or if not used in that manner, it would fatten the city’s bottom line, an attractive strategy for lowering interest rates on the city’s bond indebtedness.

Well, apparently everyone – from city staff to the council – is already placing dibs on that money as evidenced by the March 19, 2013 City Council workshop.  Ms. Sherrybargaining 3 Schurhammer, Executive Director of Finance, offered many ways to spend it. Some of the expenditures include:

  1. Paying for the special, outside audit mandated by the new council.
  2. Paying for the consultant (read Beacon Sports and its special ties to the Reinsdorfs) to write and manage the RFP for the arena.
  3. Miscellaneous city department overages or unexpected expenses.
  4. Repaying loans made from the water and sewer funds.
  5. Paying for fund transfers to and from the Risk Management Trust Fund and the Workers’ Compensation Trust Fund.

Add to that staff wish list Mayor Weiers’ recent comment about raising employees’ salaries. Also add Councilmember Chavira’s plaintive call for a Special Council Workshop to consider the issue of Public Safety employees’ compensation and Councilmember Alvarez’ desire to restore or increase funding for youth and the poor.

If everyone’s desires are fulfilled, you can say good-bye to that $17M at the end of budget workshop discussions. Then where will the funding come from if (are you listening, God?) there ever is a successful contract for the arena and its management.

tax increaseI also heard the first tentative feelers being thrown out there publicly about Glendale’s property tax rates and the fact that revenues from that source continue to drop. Don’t be surprised if there is discussion (and possibly) adoption of higher property tax rates in Glendale.

 

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Mar 13

19

Rumor of the Day (One)

Posted by Joyce Clark on March 19, 2013
Posted in Blogs • City of Glendale • Jobing.com arena  | Tagged With: , , , , , | 2 Comments

Skeete

Interim City Manager
Horatio Skeete

Several sources have related that Interim City Manager Horatio Skeete is resigning. No news on who will take his place while City Council continues search for permanent City Manager.  House cleaning by a majority of this council continues.

With resignation of City Attorney Craig Tindall and now possibly Interim City Manager Horatio Skeete it appears Glendale will be adrift for awhile. This is occurring as the council prepares to take up budget discussions for Fiscal Year 2013-14. The two persons most knowledgeable about crafting a lease management agreement for Jobing.com Arena and keeping the Coyotes in Glendale are now or soon will be gone.

 

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Mar 13

18

Saving grace

Posted by Joyce Clark on March 18, 2013
Posted in Blogs • City of Glendale • Glendale finances  | Tagged With: , , | 1 Comment

budget 3In a few weeks the Glendale City Council will begin a series of workshops to craft the Fiscal Year 2013-2014 budget. The temptation will be the unexpended $17M allocated for the Coyotes lease management agreement in the FY 2012-2013 budget and what to do with it. The temptation will be spend it now. I believe that is the worst move that this council could make.

On the March 19, 2013 City Council workshop one agenda item is The Fiscal Year 2012-2013 Financial Report Update and Fiscal Year 2013-2014 Revenue Projection.  The good news is that the temporary sales tax increase generated approximately $22M for Fiscal Year 2012-13. An insightful comment from the staff report states, “An analysis of spending habits in the community for these four months (Sept. to Dec. 2012) shows that the increase in the sales tax rate had no obvious impact on the spending pattern in the community.” All of those doomsday proclamations of “no one will shop in Glendale anymore” were flat out wrong. Shoppers, it seems, didn’t want to spend the extra money for gas to go further away or they simply did not want to leave their usual venues and venture outside their comfort zones.

Forget the Coyotes for a moment. The reason for the sales tax increase, ratified by the voters, remains the fact that the city spends more than it takes in. The Fiscal Year 2012-13 General Fund Budget is $155.3 million. Of that amount approximately $22 million (15%) comes from the increase in the sales tax rate that occurs each year over the next four years. What happens when the extra $22 million annual revenue from increased sales tax  is gone as it sunsets in 2017? That is the question.

There is a solution that began implementation in FY 2012-13 and that is a $5 million reduction in expendituresbudget cuts 1 each year from FY 2013 to FY 2017. If that course of action continues when the extra $22 million is gone in FY 2017 the city will not have to make any more draconian cuts. It will have a balanced budget whose expenditures are covered by existing revenues without having to dip into its contingency fund. The Glendale staff reports also states, ” Since the news sales tax rates are set to sunset in 2017, a long-term look at the city’s operational expenses must occur in order to plan for the eventual reduction of sales tax collections. The current financial position necessitates that the plan incorporate a phased approach and the FY 2013-14 budget will be a critical component of this plan.” In other words, get the job done and cut the city’s spending.

For the past six years during the worst of the recession, Glendale’s expenditures rose as its employee base grew and operating and maintenance costs also grew. Simply put, its expenditures have not met revenues. In the last two years, the city publicly acknowledged the problem and began laying off employees because quite simply, personnel costs represent about 70% of the General Funds’ expenses. That is the major expense and will require major cuts.

A city primarily produces one thing and one thing only – service to its residents. Yes, it produces one commodity as well, water, but that cost is borne by the people that use and pay for it. Service costs are built on two items: 1. buildings and equipment with their operating expenses and maintenance; and 2. employee wages and benefits. In the past several years, the former council purposefully began reducing personnel (wages and benefits) and  non-personnel expenses (operating and maintenance). The city has reached the point where non-personnel costs have been decimated and the only way to continue to cut them further is to reduce service areas or levels meaning that further personnel reductions will be necessary.

san_wrkr[1]Whether it is libraries, public safety or trash collection, they are all services offered to residents. The cost to provide services continues to outstrip the revenue the city takes in. The city must rein in the cost of services to have any hope of creating a balanced budget in FY 2017 when it loses the extra $22 million in annual revenue. The 2012 city council committed to the plan of cutting $5 million from the budget every year until 2017. To date the new council has been reluctant to follow through.

In an effort to avoid the pain of making another $5 million in cuts this coming fiscal year and each year for the next few years, this new council may consider the $17 million in this year’s budget as “found” money and spend every dime of it. Not a good idea. If they choose that course they are not solving the underlying problem of not enough revenue to cover costs. They are merely delaying the problem and compounding it. Saving the city’s money is not a foolhardy strategy but rather it is a grace to be nurtured and preserved.

savingsThe most prudent course of action is to place that $17 million in the city’s “rainy day” (unappropriated contingency) fund and to make the necessary $5 million in cuts this year. Increasing the city’s contingency fund is a signal that the bond market considers favorably and offers the city the opportunity to decrease interest rates even further on its current debt service load of $86 million (FY 2012-13). The debt service load is the annual amount paid in principle and interest on the city’s total debt.

Another reason to place the $17 million in contingency is that there may be another deal to keep the Coyotes in Glendale. Any deal will require a certain unknown amount as the annual lease manager fee. Having that money in reserve resolves the issue of where the fee is to come from.

A simplistic analogy is that you have a $1000 monthly mortgage payment but your income is only $900 a month. What do you do? I guess you could run up more debt on a credit card but that only delays and compounds your problem.  The best way to face the problem is to cut your monthly expenses.

Will this council do what you would do? Will it responsibility continue to cut its expenses over the next four years or will it spend “found” money now to avoid pain of making further, necessary cuts and delay the problem only to face a bigger problem in FY 2017?

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