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Joyce Clark Unfiltered

For "the rest of the story"

Jul 13

1

Analysis of the Renaissance Sports and Entertainment bid…Part 3

Posted by Joyce Clark on July 1, 2013
Posted in City of Glendale • Glendale finances • Jobing.com arena  | Tagged With: , , , , , | 7 Comments

words 6bargaining 3I want to commend attorneys for both Glendale and RSE. When I received the original June 26th draft of the Agreement consisting of 93 pages it took me quite a few hours to review it line by line. I ended with 18 pages of notes and they have been quite handy and well worth my time. I had quite a few issues with the original document. In reviewing the latest version dated June 28th I am quite pleased to see that many – not all – but many of my issues have been addressed. One that made me laugh out loud was the provision that Glendale would receive 100% of the Naming Rights for a future theater/stage space to be constructed within the bowl. Further along in the original document it specified that Glendale must pay for its construction or the Arena Manager would receive the proceeds of Naming Rights and apply them as reimbursement for construction costs. That provision, thankfully, has been changed and it is no longer Glendale’s responsibility to fund its construction but it still has the right to receive 100% of the Naming Rights. It appears that cooperation and communication by both sides has gone a long way to resolve many of the issues.

contractHowever, there remain several major, outstanding issues. One of those issues is that of the Noncompetition/Non-Relocation Agreement. The original June 26th agreement refers often and specifically to the dual concepts of non-competition and non-relocation although the document was never provided publicly. So there was no companion document to review. This, in conjunction with the absence of any exhibits accompanying the release of the original version, is troubling but that is for another time. In the new version of the agreement reference is now made solely to a Non-Relocation Agreement. The concept of non-competition has been removed in its entirety. Is this positive or negative? There is no way of knowing since there is nothing with which to compare the current Non-Relocation Agreement.

threaten 1Another major shift from previous deals is the concept of mediation vs. arbitration. In previous deals arbitration was the “Dispute Remedy.” In all versions of the RSE Agreement mediation is the dispute resolution mechanism. There is a difference between the two procedures. In mediation a neutral third party acts as a facilitator but is not a decision maker. Neither party is required to complete the process nor is it legally binding. The mediation resolution can be appealed through the legal system. In arbitration the neutral party acts as judge and jury. The decision is generally binding and cannot be appealed, except under very special circumstances. Mediation can be more expensive because it allows for legal appeal as opposed to arbitration which is legally binding. So the question becomes why RSE’s insistence on mediation for it seems to be upon their insistence and not that of the city.

enter 3We now know that RSE used a figure of 23 non-hockey events with attendance of 15,000 per event. Those numbers are a component of their calculations in determining the revenues from the parking surcharge and ticket/supplemental surcharges. It appears to be over inflated but it is their number, not mine, not the city’s. That goal should be acknowledged within the Agreement by incorporating accompanying performance penalties and incentives. If RSE meets less than its self-proclaimed goal of 23 non-hockey events there should be a monetary penalty. It is a concept only used in the Agreement in conjunction with hockey games. If less than 41 games are played in the arena, there is a $150,000 penalty per game paid to the city. However, if RSE overachieves or underachieves in booking non-hockey events, it should be rewarded/penalized for doing so but there is no mention of such a concept within the Agreement. Fairness dictates that non-performance be penalized and success rewarded.

man moneyAnother interesting concept within the Agreement is language that exempts the Arena Manager from governmentally imposed lease taxes on the property. If, for some reason, the Arena Manager does have to pay them, that amount will be deducted from the City’s total annual revenue to be received. Hmmmm. Should there be lease property taxes imposed that have to be paid the city is required to pay them.

It also appears that instead of allowing the city’s contribution to the Capital Improvement Fund to accumulate year over year, the Capital Improvement Fund is set to “0” every year and the funds within it revert to the Renewal and Replacement Fund that is spent solely at the Arena Manager’s discretion.

The last major change to the document is the city addition of its own opt-out provision. The city views this action as entirely appropriate. Their assumption may be based on the notion that the city has more “skin in the game” than does RSE. $15M for each of 5 years equals $75M. It has been widely reported that RSE’s equity (or “skin”) is $45M. The proposal is that after 5 years, each side should have the option of deciding whether to continue, especially if one side or the other has accumulated over $50M in debt. That option, if it remains in the Agreement, would signal that RSE’s “enhanced revenue streams” did not perform as advertised. The city’s financial shortfall in this deal is of its own making. The current council will either be comfortable in its assumption that it can weather the effects of the shortfall or it will not. Continued insistence by the city on this provision destroys RSE’s ability to secure loans because it nullifies the very element they MUST have, which is a guaranteed $15M from the city.

agenda 1In my notes I have probably identified another two dozen minor issues that require further negotiation. Listing all would turn this blog into a book. I will not inflict that agony on you. It appears that with some further negotiation and communication this Agreement could work but it does not resolve Glendale’s fundamental issue of covering a monetary shortfall of $3M annually.

Many have asked me to reveal my position on this issue. That I will not do. I have provided you with financial information on the “enhanced revenue streams” as well as information on Glendale’s precarious financial position and Agreement points that need further resolution. Many of you reading this blog have expertise in business budgets and corporate negotiating. My role is to offer municipal expertise and to provide context to balance that.  It is up to you to decide if this is a good deal for Glendale.  This is exactly polling 1what every current councilmember is wrestling with. As leaders of this city they have the prime responsibility of insuring the continued financial health of the city. My feeling is that some are now struggling with recent decisions and recent votes and beginning to realize the effects of those decisions.

confusion 3Will this Agreement help or hinder Glendale’s continued financial health? Of course there is the overwhelming element of politics. Some councilmembers’ positions will be taken as a result of ego; others simply wouldn’t say ‘yes’ even if God invited them into the Pearly Gates; still others have only a partial grasp of the entirety of the deal. But it is not my call. I am no longer a sitting councilmember. Whatever their collective decision I will accept it and abide by it, as everyone should reasonably do.

Fasten your seat belts — if past history is any indication we are in for a bumpy ride. I hope that I am wrong but there may very well be challenges to this Agreement.

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Jun 13

30

Analysis of Renaissance Sports and Entertainment bid…Part 2

Posted by Joyce Clark on June 30, 2013
Posted in City of Glendale • Glendale finances • Jobing.com arena  | Tagged With: , , , | 2 Comments

In my last blog $3,109,580 was identified as the shortage Glendale faces with acceptance of the Renaissance Sports and Entertainment (RSE) bid. This requires looking at the city’s overall financial health. A useful measurement is to look at the city’s General Fund “Ending Balance” (it may be called Contingency Fund or Rainy Day Fund). It will be helpful to refer to slides presented at the city council workshop of June 29, 2013. Here is the link:

http://www.glendaleaz.com/Clerk/agendasandminutes/documents/062813CoyotesandArenaMgt.pdf .

coins 1Some historical context is in order. In the early to mid 2000s Glendale’s economy, along with the rest of the nation’s, was robust. The arena had been built, Westgate was taking shape and growing, developers were buying land in the surrounding area and submitting development plans faster than they could be processed. When the national recession first took shape the city had General Fund revenues of $131,807,000 and maintained an Ending Balance of $49,338,000 (well over the city policy of 10%). All “expert” advice, at that time, projected a deep recession of 3-5 years and a slow recovery. Council had the choice of starting to make major budget cuts (including lay-offs) or using its Contingency Fund. It chose to use its Contingency Fund to avoid lay-offs and to weather the recession. Was it the correct decision? Obviously not, but “Hindsight is 20-20.” We now know that budgetary cuts should have been made then, just as municipalities all over the valley did, for cuts are cumulative and can help to alleviate the need for drastic cuts in the future. There were some budgetary cuts made at the time and employee furloughs were instituted but those strategies were not strong or deep enough and came too late to create the desired outcome. Those following the Coyotes saga no doubt recall former Mayor Scruggs complaining bitterly and saying that we were told that Glendale was different and no cuts were necessary. What was done was done but it set up the current fiscal crisis the city now faces. By the end of the decade with the national economy still in recession the previous council had learned a painful lesson and was committed to making budget cuts and began a plan to do so.

We come to the present. The city’s total General Fund revenues for Fiscal Year (FY) 14 are $161,500,000 and projected to increase by a mere $800,000 over the next 5 years (FY 18) to $162,300,000. In the intervening years there are General Fund revenue increases of nearly $18M but they are temporary increases based upon the raised sales tax due to sunset in 5 years. After the 5th year, FY 2018, the sales tax increase sunsets and the General Fund revenue will revert to the level of FY 14. The temporary sales tax increase was designed to do one thing only. That was to provide the city some breathing room while it continued to make budget cuts of $5M a year for 5 years totaling $25M over 5 years AND rebuild its Ending Balance to a minimum of 10% of its General Fund revenues. It WAS a sound plan and a plan that allowed for a hockey lease. It is not the plan of the newly elected council for there are only scheduled cuts of $4.8M in FY15 and $9.5M in FY18 for a total of $14.3M. That is $10M shy of the amount that is needed to replenish the General Fund and will present problems when the sales tax increase disappears—unless this council decides to continue the sales tax increase ad infinitum. I suspect that is exactly what will occur despite its sunset promise included to gain citizen voter support to ratify the increase.

Now add a couple of facts.  First, the Fire Department had a structural deficit of $3.5M this Fiscal Year, FY 14. It was fixed by budget amendments passed by council 6 weeks ago and on June 28th. It solved the problem—for this year only. Next year the Fire Department will face the same structural deficit of $3.5M with no direction given by this council as to where and how this money is to be found. Our contractsecond fact is at the June 25th voting meeting of Council a restructured contract with Southwest Ambulance was approved. (FYI: SW’s Martin Nowakowski, its Public Affairs Director, is a friend of Norma Alvarez and Sammy Chavira and supported both in their election bids) The old contract called for 2 ambulances that were in operation 5 days a week for 9 hours a day. The new contract calls for 3 ambulances in operation 7 days a week for 24 hours a day. It results in an increase of future expense to the city, in this contract of $1M. It is possible that SW may pick up $400,000 of the million dollars but there is still an increased contract cost of $600,000 that is a new city obligation. And it may interest you to know that city personnel assisting on these ambulances are paid overtime pay by Glendale. What a sweet deal. Council was briefed and was made fully aware of the increased cost to the city. Neither example of fact has corresponding cuts in other areas. In particular, the Southwest Ambulance vote passed without a single councilmember question regarding it. These two fiscal examples demonstrate that council still refuses to recognize the serious financial condition of the city.

The city’s Ending Balance for this Fiscal Year, FY 14, is $8M and equals only 5% of the General Fund revenues — not a good position in which the city finds itself. The good news, however, is that it does grow in the next 5 years and by FY 18 is $20.3M (or 12% of General Fund Revenues).

Why is the Ending Balance or Contingency so important? First, it is a measurement that bond raters look to in order to determine a city’s creditworthiness. It’s like an individual’s FICO score. The higher it is the lower the interest rate. It serves a second purpose in that it can be drawn upon in an emergency or when unexpected expenses occur. For instance, the $120,000 paid for a search of a new City Manager and the $500,000 for the audit as well as the Beacon consultancy contract were paid from Contingency as these were new, unbudgeted expenses. Contingency can be used to cover increases in the price of gas for city vehicles and it can be used to cover unplanned increases in medical premium costs. Right now, with only $8M in reserve, the city is living on the edge.

How does acceptance of the RSE bid affect the city’s Ending Balance (Contingency Fund)? Instead of $8M in reserve this year, it drops to $5.7M or 4% of the city’s revenues. By FY 18 instead of a healthy Contingency of $20M it is only $8.6M (in other words, in 5 years, it is exactly the same as today).

How does acceptance of the RSE bid affect the city’s budget? Its revenues do not change but its expenses have increased by $9M as the city goes from paying a $6M a year management fee to a $15M a year management fee. We must factor in the “enhanced revenue streams” and in doing so the city projects a $2.3M shortage for this budget year (FY 14). I have shown a figure of $3.1M which I believe to be more realistic. However, whichever figure is used, there is a shortage that has to be covered.

If the RSE bid is accepted there are only three ways that the shortage can be covered. Some explanation is required to better understand Option #3 offered below. The city established an escrow account by borrowing money from other funds, i.e., Sanitation, Vehicle Replacement, etc. It has $20M in it – not quite the full $25M owed to the NHL for the second year of arena management. If the RSE bid is accepted the NHL has publicly stated that they will accept payment of that $25M in installments of $5M a year for 5 years. The options are:

  1. question 3The city can make further budget cuts in FY 14 by reducing service levels to residents, cutting more employees or trying to find further efficiencies
  2. It can pay the shortage from the  Contingency Fund by drawing down the balance to $2 or $3M instead of the current $5.7
  3. It can use the $20M reserved in its escrow account, earmarked for the second NHL payment of $25M, and bring down the reserved escrow amount by paying the NHL $5M this year and covering only this year’s shortfall of $2-3M

Imagine yourselves as a current councilmember for just a moment—not a Coyotes fan or a Ken Jones aficionado—but as someone charged with sound financial decisions for the city. Would you accept or reject RSE’s bid? If you chose to accept RSE’s bid which of the 3 options would you choose? Would you reexamine this council’s current financial plan to make strategic cuts and perhaps save Westgate and its future or would you make a leap of faith and decide that an anchor tenant is not necessary? It’s in your hands. In my next installment I will review items within the RSE contract that remain problematical for the city and could be resolved with further negotiation.

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Jun 13

29

Analysis of Renaissance Sports and Entertainment bid…Part 1

Posted by Joyce Clark on June 29, 2013
Posted in City of Glendale • Jobing.com arena  | Tagged With: , , , , | 9 Comments

prop 202A number of people have asked me (as a former councilmember) to weigh in, pro or con, regarding the Renaissance Sports and Entertainment bid. It may very well become a moot issue if RSE rejects the city’s latest proposal to have the same 5 year opt-out clause as RSE enjoys. Until now I have instead spent all of my time since the original bid was made public reviewing and analyzing it. Note that a revised version has since been made public. In the newest public version changes that had been discussed at the city council workshop of June 28, 2013 are incorporated. There is now a joint defense clause, removal of all “novation” provisions and the city receives all insurance proceeds in the Casualty and Condemnation provisions. These changes and others make it a better deal for the city. Council gave direction to continue negotiations up until the eleventh hour (Tuesday, July 2nd council meeting at 7 pm). We can hope that RSE and the city will continue in the spirit of cooperation.

numbers 2As for the deal itself let me share my analysis. Let’s look at the numbers. The first premise is that RSE MUST have $15M a year guaranteed by the city. Why? An assumption, that has never been refuted, is that RSE needs $15M a year guaranteed by the city to satisfy the lender’s (Fortress Investment) requirements. The city has an approved budget that allocates $6M a year thereby creating a $9M a year shortfall for the city. RSE has proposed to sweeten the pot and supplant that $9M a year by creating “enhanced revenue streams.” Some are revenue streams whose numbers can be accepted with some sense of surety. The hockey ticket surcharge is based on 41 games with an average attendance of 12, 630. Those are reasonable numbers based on past performance. You may think the average attendance figure is low but it is RSE’s number and to be applauded because of their conservative approach. The “enhanced revenue” produced from this calculation is $1,553,490. It is a number we can accept as valid.

The next number is the team rental of $500,000 a year. That is, of course, a reliable number. One obvious question is why does this number not increase over time? In previous deals the team rental charge escalated over time. Another fairly reliable number is the sales tax generated at hockey games. RSE pegs it at a little over $600,000 a year; the city uses a little over $400,000 a year. I am inclined to accept the RSE number for the sake of argument.

So far, so good. We know the city can rely on these “enhanced revenue streams” of Hockey ticket surcharge, team rental payment and sales taxes generated from hockey games. Those items total $2,690,420 and we can be confident in realizing that revenue.

numbers 1But a look at the rest of the estimated revenue numbers show they appear to be overinflated. Let’s take the easiest one first, Naming Rights for which the city will receive 20%. Typically this fee is paid in installments. For argument’s sake let’s peg the Naming Rights fee at $10M. Generally, this would be paid over a period of years and often it is a 10 year period. That payment would be approximately $1M a year and the city’s portion would be $200,000 a year for 10 years. So instead of the RSE Naming Rights figure of $671,600 a year, a more conservative and reasonable number is $200,000 a year. As a point of comparison, this is similar to the Naming Rights deal at Chase Field and it receives a payment of $1.1M a year.

The parking revenue figure is highly inflated. The presumption is that all 5,500 parking spaces will generate $10.00 a space at every hockey game. Did you know that there are an additional 9,500 parking spaces at Westgate not subject to this surcharge? Hockey fans can park at Tanger, behind the AMC Theater, etc. and it is a short walk to the arena. Sooner or later, the owners of these businesses will become very unhappy to see hockey fans occupying their customer parking and will begin to charge…$5 a car which will be reimbursed to their patrons. I have also been informed that should there be a new parking fee imposed by the city and the team the Cardinals will charge $5 a car for their 6,000 spaces on Maryland Avenue, across the street from Jobing.com arena. There is also a secondary, but an equally important issue, the number of hockey fans parking in the Desert Mirage neighborhood across the street from Jobing.com arena will most surely increase. It is a neighborhood of over 1,200 homes and some hockey fans (although a minimal number) already park in their neighborhood on hockey game days. The RSE number also includes parking for non-hockey events with 23 events a year and 15,000 attending each of those 23 events. In my estimation it is unrealistic. More about that when we review the $5 per ticket surcharge for non-hockey events. RSE, and the city accepts, a figure of over $2M for parking revenues. This is way too optimistic and a more conservative and realistic figure is half that, or about $1M for parking revenues.

The last number RSE offered was revenue generated per year of $1,725,000 for a non-hockey ticket surcharge of $5.00 per ticket for 23 events a year and attendance of 15,000 at each event. I dug out old material I had related to arena event and attendance figures and I also reached out to people knowledgeable in the concert venue business. From 2003 (the year the arena opened) until today the maximum number of events ever held at the arena in one year that generated an attendance of 15,000 or more has been 15 events. Did you know that throughout the entire Phoenix Metro area there are typically 25 major concerts (what is called in the business, Type “A,” such as a Justin Bieber) a year? 4 of them were held in Jobing.com Arena this year. RSE’s estimate of 23 such concerts drawing 15,000 or better is wishful thinking. A more realistic revenue number for the non-hockey ticket surcharge would be under $1M a year. For the sake of argument, we will use $1M a year. How do these numbers add up? $200,000 a year for Naming Rights; $1M a year for Parking Revenue; and $1M a year for the ticket surcharge for non-hockey events totaling $2,200,000.

question 3Let’s add our reliable, take-it-to-the bank number of $2,690,420 and our far more conservative number of $2,200,000. The total is $4,890,420 and the magic number in “enhanced revenue streams” that must be achieved to make the city whole is $9M. Oh wait, there’s still the Supplemental Ticket surcharge of $1.50 on every ticket. RSE’s number is $1,294,245. It is an overestimate because it is based on that same pesky non-hockey event estimate of 23 events with 15,000 or greater attendees. A more realistic estimate would be no more than $1M a year. So add another million dollars to our $4,890,420 and our final total of “enhanced revenue streams” is $5,890,420 – not the $6.7M used by the city or the $7.3 used by RSE.  Yet we need $9M a year. We are short $3,109,580. How can that shortage of a little over $3M a year be covered by the city? Where will the money come from? In my next blog we’ll look at the city’s budget and its overall financial health.

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Jun 13

26

Troubling times

Posted by Joyce Clark on June 26, 2013
Posted in City Council Actions • Jobing.com arena  | Tagged With: , , , , , , | 9 Comments

A disclaimer: I have not made a decision on the Renaissance Sports and Entertainment bid to manage the city’s arena. It is not possible until I have read the document. To date it is not available to the public.

I don’t usually post 3 blogs in one day but this appears to be one of those days that demands it.

On June 25, 2013, Paul Giblin, a reporter for the Arizona Republic issued the following story online, Glendale still unsure about Phoenix Coyotes deal. Here is the link: http://www.azcentral.com/community/glendale/articles/20130625glendale-unsure-phoenix-coyotes-deal.html . Several aspects of his story are troubling. One issue is that a vote is still scheduled for hidden agendaTuesday, July 2, 2013. It is my understanding that the council has requested another Executive Session for Thursday, June 27, 2013. The city had better made sure that notice of another Esession on June 27th is properly posted 24 hours in advance. Which means that the meeting notice has to be posted on Wednesday, June 26th…today. However, even more worrisome is that with an Esession scheduled for June 27 the very earliest the deal points could be posted publicly would be on Friday, June 28th or even as late as on Monday, July 1st. Could the city post as late as 24 hours before a scheduled vote? Yes, they could but would they? I hope not as suspicions will shoot through the roof if the public is given one day to review and understand any deal between Renaissance Sports and Entertainment (RSE) and the city.

city hall 2

Glendale City Hall Complex

Now, about that second $25M the NHL has offered (at the 11th hour) to take payments on of $5M over each of the next 5 years. Great…too little, too late and it doesn’t solve the city’s problems. The $30M leaseback of City Hall was designed to replenish the city’s Enterprise Funds, Vehicle Replacement Fund and Technology Replacement Fund.  Glendale staff crafted a brilliant strategy. Now that strategy has been tabled by council until after the scheduled Coyotes vote on July 2nd… Hmmmm…The $20M the city has held in an escrow account for the NHL payment simply isn’t enough to cover all of the city’s needs. It will pay back some of the loans leaving $5M still outstanding.  While a generous offer on the part of the NHL, it could have been done a long time ago and in fact, I and several former councilmembers called for just such an arrangement. Why now? I suspect it is in reaction to what they perceive as a very negative story about the city planning to enter a leaseback of City Hall to pay back loans directly related to the $50M partially paid and partially still owed to the NHL.

To discover that councilmembers are not on top of the revenues derived from either the Westgate area (remember those revenues are already being used to pay off the original construction debt on the arena and are NOT new found money) or the arena is disturbing to say the least. At least one of them has touted himself as an expert on the entire RSE deal.

Norma Alvarez

Norma Alvarez

Lastly, good old Councilmember Alvarez and her statements have got to have you snapping your heads in double-take mode. Alvarez said, “I called them knuckleheads, because they don’t get it. They don’t get it. They don’t get it. They’re going to continue discussions. Discussions of what? We’re selling City Hall because of paying $50 million. C’mon. C’mon.” Factually she is incorrect. The city is proposing a leaseback arrangement not an outright sale of City Hall with visions of employees moving out after a sale. As for continuing discussions, they should continue but they don’t have to result in acceptance of the deal…not if RSE cannot or will not guarantee “enhanced revenue streams” for the city.

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Jun 13

26

Glendale Star…sad, sad, sad

Posted by Joyce Clark on June 26, 2013
Posted in Jobing.com arena  | Tagged With: , , | 2 Comments

newsIt is truly sad when a local newspaper such as the Glendale Star will report ridiculous stories simply to “gin” up its readership and that is exactly what they have done. In an “exclusive” article by Darrell Jackson, updated on June 25, 2013 entitled Proposal gives city option to purchase the Coyotes it is reported there is a company that had reached out to and would work with the city to buy the Coyotes ala the Greenbay Packers. Here is the link but please consider not going there. Reading this inane article will just warm the cockles of the editor’s heart and perhaps encourage more of this!

http://www.glendalestar.com/news/article_fa5c1c68-dab5-11e2-9599-001a4bcf887a.html

greed 1It is a travesty of journalistic reporting when if one had taken the time to fact check one can read the NHL By-Laws to find out that it is not possible. Add to that an NHL statement from a few years back, when the idea first surfaced and quickly died, that categorically denied the viability of that strategy.

We know the Glendale Star is trying to compete with the big boys but this reporting ranks right up there with their expectation of finding a pot of gold in City Hall as a by-product of the $500,000 city audit.

While there may have been an email proposing such a scheme it would have been rejected by the staff immediately knowing the NHL’s position on the issue. That’s why the mayor has said he has not seen such a proposal. Bringing it forward would have been a waste of time and resources.

Readers would like, although they often do not get, reporting that is fair, accurate, unbiased and based upon the facts not fantasy designed to titillate its readership.

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Jun 13

19

Non hockey management is not a silver bullet

Posted by Joyce Clark on June 19, 2013
Posted in City of Glendale • Jobing.com arena  | Tagged With: , , , , , , | 3 Comments

Some of those on council believe that all of Jobing.com’s problems regarding increasing its revenue can be solved by finding a management company that will book a ton of non-hockey events, especially major concerts.  I thought it would be interesting to take an Internet walk through the entertainment promotion industry. I don’t pretend to be an expert on this issue and I am sure somebody will correct me on something!

prop 202The gorilla in the room is LiveNation. In 2005 (last year for which I could find numbers) earned $1.3 billion dollars world-wide. It has relationships (contracts) with 135 venue sites world-wide and 92 of those are in the United States. It has relationships with Desert Sky Pavilion, Talking Stick, Comerica and Celebrity Theater (as of 2005) in the Phoenix Metropolitan area. It, like other promoters, also has a roster of national, well known artists that perform exclusively at LiveNation venues.

enter 1 The second largest is Anschutz Entertainment Live (AEG). In 2005 it earned $417 million dollars—only 20% to 30% of LiveNation’s income.  In September, 2012 AEG announced it was selling off its Entertainment Live subsidiary only to reverse that action in March, 2013. AEG is the company that currently manages Glendale’s Jobing.com Arena. The third largest company is the House of Blues Entertainment. In 2005 it earned $245 million dollars—about 10% of LiveNation’s income. But wait…the following year, 2006, LiveNation acquired the House of Blues and picked up Casino Arizona as another contract in the Phoenix area. There are many small firms (less than a handful in the Phoenix area) whose annual income is less than $20 million dollars a year.

Let’s look at the two most comparable venue sites to Jobing.com Arena. One is US Airways, home to the Phoenix Suns. It is run and events are booked by Phoenix Arena Development (one of the two bidders to be considered by Glendale). It is also the home of the Arizona Rattlers and Phoenix Mercury. In essence, it has 3 anchor tenants. Between June and December, 2013 there are 10 major concerts booked. The other comparable site is Chase Field, home to the Arizona Diamondbacks, its only major anchor tenant. SMG World manages this venue (and is also a finalist in Glendale’s bidding process) and uses Select Artists Associates of Scottsdale as its event promoter. It has 3 major concerts booked between June and December, 2013. It will be very interesting to see what each of these companies want in terms of an annual management contract. Will there be penalties in the contracts if a named minimum number of events is not achieved? Will there be an incentive if the company exceeds a mutually agreed upon goal?

As you can see, the Phoenix Metro area is a highly competitive market. There many venues from which to choose and LiveNation have contracts with many of them. You can be sure LiveNation, with a virtual monopoly in this country, dictates the terms and fees for the major events it books.

enter 3Just to give you an idea of how competitive our market is, here are just some of the sites that can and do host major concerts: ASU Gammage, Desert Sky Pavilion, Celebrity Theater, Chandler Center for the Arts, Chase Field, Comerica Theatre, Fort McDowell Casino, Herberger Theatre, Grand Canyon University Arena, Jobing.com Arena, Mesa Arts Center, Scottsdale Center for the Performing Arts, Orpheum Theatre, Talking Stick Resort, Tempe Center for the Arts, US Airways Center and University of Phoenix Stadium. This list is by no means complete and does not include dozens of smaller venues. This market is not an easy one. Steve Ellman, when he controlled Jobing.com Arena was highly successful in booking major concerts. When Jerry Moyes and the NHL took control of the arena that was not their focus and so we saw fewer and fewer major events at Jobing. This year the number of major events booked was so few that it is embarrassing.

What can a venue manager do in this highly competitive market of at least 17 major venue sites if there is no relationship with LiveNation or AEG? They host smaller, less lucrative events such as rodeos, religious groups and family events. That works well if your venue is small but large ones like Jobing.com Arena need large events to offset the costs associated with hosting. Note than even the UofP Stadium hosts RV and car sales nearly every weekend in addition to gun shows in an attempt to shore up its bottom line. I suppose a venue manager could undercut the big boys and offer the venue for rock bottom rental fees and hope to cover all or part of the loss with concession and parking revenue but that is risky on so many levels.

Hiring a non hockey arena manager has never been in the best interests of the arena or Glendale. A permanent team owner hired to manage the arena guarantees 41 nights of hockey with “butts in seats.” It will be in the owner’s best interest to mount a strong marketing campaign for the Coyotes and put even more butts in seats as well as to work to acquire as many non-hockey events as possible to increase the bottom line of profitability. This is not a difficult concept to understand and yet there are those on Glendale’s city council who refuse to acknowledge this concept—out of sheer stubbornness or because of another agenda?

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Jun 13

15

Sold to the highest bidder

Posted by Joyce Clark on June 15, 2013
Posted in Jobing.com arena  | Tagged With: , , , , | 2 Comments

jobing.com arena

Jobing.com arena

To date the media and Glendale residents have been denied access to the four bids submitted to Beacon Sports, the city’s $100,000 consultant hired to accept and vet all bids to manage Jobing.com arena, a city-owned facility. Very recently the city finally released the names of the four bidders and it has been reported that R Entertainment and Phoenix Monarch Group (PMG) were rejected for not meeting minimum specifications. By the way, Art Jimenez, principal of PMG, publicly stated that he has formed a new group, PMG Management and Entertainment, LLC. As of this date it is not registered with the Arizona Corporation Commission and the name is still available, if anyone out there is interested.

There is no legal basis with which to deny the public access to the Beacon bids. We first go to the City Charter to see what it says about bids. In Article VIII, Section 2-Competitive Bidding it says, “The city council shall establish by ordinance formal guidelines regulating the purchase of goods and services by the city. Such ordinance shall specify the conditions pursuant to which formal competitive bidding shall be required, conditions pursuant to which informal competitive bidding shall be required and those conditions under which no bidding for city contracts shall be required.”  Last amended on 3-15-88.

This section authorized the city council to establish a formal bidding process. That formal process is outlined in Glendale’s Municipal Code, which was originally adopted and subsequently amended by city council vote as ordinances. An ordinance is a city law and can only be superseded by the Arizona Revised Statutes (established and passed by the Arizona Legislature).

scalesWe then go to Glendale’s Municipal Code, Section 2-145, Formal Purchase Procedure, (2) b, Sealed Bidding Procedure (IFB) which states, “Bids shall be opened publicly at the time and place designated in the invitation for bids. The amount of each bid, and such other relevant information as may be specified by the materials manager, together with the name of each bidder shall be recorded as determined by the materials manager. This record shall be open to public inspection after the bid opening in a manner prescribed by the materials manager (bold mine). Except to the extent the bidder designates, and the city concurs, trade secrets or other proprietary data contained in the bid documents shall remain confidential.”

Then we have to check Arizona Revised Statutes to see if there is anything different from city code. For that information, we refer to Arizona Revised Statutes, Section 41-2533. Competitive Sealed Bidding. D. which states, “Bids shall be opened publicly at the time and place designated in the invitation for bids.  The amount of each bid, and such other relevant information as may be specified by rule, together with the name of each bidder shall be recorded.  This record shall be open to public inspection at the bid opening in a manner prescribed by rule (bold mine).  The bids shall not be open for public inspection until after a contract is awarded.  To the extent the bidder designates and the state concurs, trade secrets or other proprietary data contained in the bid documents shall remain confidential in accordance with rules adopted by the director.”

Well, look at that, the Glendale Municipal Code and Arizona Revised Statutes (ARS) almost mirror one another on the language! Please take note of the sentence in the above cited ARS that says, “The bids shall not be open for public inspection until after a contract is awarded.” That prescription is lacking in Glendale’s Municipal Code. As it is not a prescription in Glendale’s Municipal Code it appears that Glendale is required to release the bid information after bid opening and I don’t think it means weeks later. Both bodies of law allow proprietary information to be redacted from any bid. And both codes allow public inspection after the bids are opened.

It would seem that Glendale has failed to follow its own Municipal Code process. It should release the results of the bidding process of all 4 bids NOW (in fact, it should already have done so) and redact only that information that is proprietary.  Just to be sure there is no confusion over what constitutes proprietary information; Webster’s defines it as, “possession, ownership or exclusive right.” It’s time for Glendale to cough it up.

There is no justifiable reason to discuss the Beacon bids in council Executive Session. They should have been publicly released by now. Those bids are what they are. The presentation on the bids should be in public workshop session. Council either accepts one or it rejects all but it would provide the public with an opportunity to discover just exactly how much two major companies, SMG World and Phoenix Arena Development think it’s worth to them to manage and operate Jobing.com.

There is also no reason why Councilmember Sherwood cannot discuss the worth of keeping the Coyotes in Glendale. After all, it’s not new information. During the Jamison negotiations, Interim City Manager Skeete publicly stated that keeping the Coyotes brings Glendale an approximate additional million dollars a year in revenue.

contractIt is justifiable and prudent that council discuss the RSE deal in Executive Session. They are in the midst of negotiations with the group. It provides the full council an opportunity to hear the terms of the deal and to offer any and all changes to those terms for further negotiation. It was no more than the former council did that resulted in a lower management fee and penalties and incentives for under/over performance. Once all terms are satisfactory to both sides, the deal terms should be released publicly and the vote scheduled for one week after release.

It has been widely reported that the Renaissance Entertainment’s management deal with Glendale may come before the council for a vote on June 25th, June 28th or as late as July 9th. When there was all of that furor over the Jamison ownership deal last acceptanceyear a court mandated that the deal be made public one week before any scheduled council vote on the issue. I suspect denialthat prescription still holds true. In that case, if the RSE deal is scheduled for a council vote on June 25th, it must be released to the public for its consideration one week before on June 19th. If the vote is June 28th, it must be publicly available on June 21st. If the vote is on July 9th, the public is entitled to review it on July 3rd. Come on, mayor and council, get your act together and practice the transparency that you love to preach.

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Jun 13

13

Pick your poison

Posted by Joyce Clark on June 13, 2013
Posted in Jobing.com arena  | Tagged With: , , , , , , , , , | 16 Comments

jobing.com arena

Jobing.com Arena

Well, well,well…Glendale has offered a crumb to its residents by making public the names of the four bidders that responded to the Beacon Sports RFP (at a cost of $100,000) for management of its arena, Jobing.com. More to come about the bidding process in a future blog.

The contenders are: Phoenix Monarch Group, R Entertainment, SMG World and Phoenix Arena Development. Have you noticed who is missing? We see none of the expected and well known players in either the arena management industry or the entertainment venue industry – Global Spectrum, AEG and IFG. I suspect that when they learned that as part of the bid Glendale was seeking their investment (counts for 10% of bidding score) they probably said thanks, but no thanks.

Let’s look at the bidders. First up is R Entertainment. It is a privately held company registered with the Arizona Corporation Commission in August, 2006. It is located in Scottsdale with 1-10 employees. Its Statutory Agent is Kerry Dunne and according to the media, a partner. It manages one venue, the Pepsi Amphitheater at Fort Tuthill County Park near Flagstaff. By the way, the seating capacity of the Amphitheater is 2,750, not quite a 17,000 seat arena. I congratulate them for submitting a bid but I fear they are way out of their league (no pun intended). Investment counts for 10% of the bid score and this company is too small to make a major investment in Glendale’s arena. Experience is another 15% of the bid score and the company’s management experience with the Pepsi Amphitheater does not meet managing a similar sports facility. Personnel accounts for another 10% of the score. The current management staff of the arena numbers about 135, full time and part time. With a staff of 1-10 people R Entertainment is simply too small to manage a venue of this size. This company’s bid could lose about 35% of available points according to the bid criteria. Quite frankly, it should have been rejected as not meeting the basic criteria of the bid.

Next up is SMG World whose headquarters are located in Philadelphia, PA. It is a world-wide event and venue management company established in 1977. It has the personnel and experience to manage Jobing.com arena and advertises on its website http://smgworld.com that it has managed 230 facilities. So it certainly is a viable contender. One problematical concern revolves around an old saying that you are judged by the company you keep. SMG has a relationship with the Bidwill subsidiary, Rojo Event Management. Yes, the same Rojo that submitted a bid to the city to manage its Youth Sports fields adjacent to the stadium. Rojo’s bid for management is greater than the current Global Spectrum contract and offers way less revenue to the city. This is the Youth Sports field bid the city should reject unless it likes being taken to the cleaners once again.

Another bidder has indeed risen like the mythical Phoenix Bird and that is the Phoenix Monarch Group (PMG). It was registered with the Arizona Corporation Commission in August of 2012 and its managing member is Arturo Jimenez. In the one telephone conversation I had with Mr. Jimenez (at Councilmember Lieberman’s request) he indicated that an Alvarez (don’t remember the first name) and Tony Herrera were part of his group (more about them in a minute). This group should sound familiar to you. It the group that Councilmember Alvarez brokered a meeting for with former Mayor Scruggs and former Councilmember Lieberman. At that time they were asking for about $7M to host 25 events. Their experience is problematical. They ran an event for the Hispanic Fire Fighters Association (HFFA) which ended with HFFA paying vendors because PMG did not. The only other event (that they classify as ‘major.’ I do not) PMG hosted was a Hispanic Festival for a Peoria Councilmember. PMG easily loses 35% of bid points for lack of experience, personnel and investment. But once again the specter of relationships is troubling. I do not know if the Alvarez Mr. Jimenez referred to is a distant, or otherwise, relative of Councilmember Alvarez. Mr. Herrera, another PMG participant, has a close relationship with Councilmember Chavira with both listed as managing members of two companies, Cool Heads,LLC. and the McCoy Group, LLC. At least in terms of public perception, if no other, Councilmembers Alvarez and Chavira should recluse themselves due to a conflict of interest. They have no business advocating for or participating in discussions and votes on choosing a Beacon bidder to manage the arena.

Last up is Phoenix Arena Development Limited Partnership. It is headquartered in Phoenix but according to the Arizona Corporation Commission it is a foreign limited partnership. It is a privately held company and owned by the Phoenix Suns Limited Partnership. The general partner of the Phoenix Suns Limited Partnership is JDM Sports, Inc. and as of 1992 Jerry Colangelo was its president. This company was created for one purpose only and that is to manage the Suns basketball team’s venue. It crafted a sweet deal for itself with the City of Phoenix. Reminds me of the Ellman deal, Coyotes and Jobing.com Arena. It has experience in managing one venue exclusively and somehow or another; I don’t think they will be making an investment in Glendale’s arena. More likely is that, if chosen, Glendale will end up making a hefty payment to this company.

So there you have it – the four bidders that Glendale taxpayers spent $100,000 to find. Pick your poison. It’s the height of chutzpah for Beacon to even present R Entertainment or the Phoenix Monarch Group as viable bidders to the council. Clearly neither one is qualified by experience alone, to manage Jobing.com. Left standing is SMG World with ties to the Bidwills or Phoenix Arena Development with ties to Colangelo. To date, we have not seen the details of any of these bids and have no clue as to the management fee any of these groups is requesting.

Coyotes logoKeep in mind that NHL Commissioner Gary Bettman said the Beacon process was “silly” and it is. The same, major issue is before this council just as it was before the former council and that is, if you choose to keep the Coyotes in Glendale, Westgate viable and save the city’s third major economic area, you must pay the freight and use the team owner as the arena’s manager. The only issue for Glendale is what can it afford to pay to make that happen and will it be enough to keep the Coyotes long-term?

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Jun 13

13

Verbatim transcript of Bettman/Daly 30 minute press conference of June 12, 2013

Posted by Joyce Clark on June 13, 2013
Posted in Jobing.com arena  | Tagged With: , , , , , , | 4 Comments

Below is a verbatim transcript of the Bettman press conference. I prefer to personally hear what is being said about important issues and to make my own verbatim transcript for reference. I did this often when I was on city council and made verbatim transcripts of the former mayor’s remarks as well as staffers and other councilmembers.

It begins with the end of Commissioner Bettman’s opening remarks. I have only transcribed those portions of the press conference relevant to the Coyotes issue but I have inserted time markers for unrelated reporters’ questions. The video is posted on many sites. I pulled it from the Coyotes team website.

Bettman

NHL Commissioner
Gary Bettman

Gary Bettman (GB): “Phoenix. No doubt we’ll get a question. Obviously, we’re getting to the point where some decisions are going to have to be made both by the City of Glendale and by us. I haven’t set a deadline but time is getting shorter. We’re looking forward to realignment for next season. We’re looking forward to the future. But as we look back on this season and take a deep breath before we look ahead to the Stanley Cup Final and then to next season, we find ourselves in a good, strong place. And we’re grateful to be there. And we’re grateful to be here with all of you. So, we’ll take your questions.”

4:55 Reporter question 1 (RQ 1):  What preparations for stormy weather in Chicago?

6:20 RQ 2: Why is Olympic process dragging on so long?

7:52 RQ 3: Question about realignment, names of conferences, etc.

RQ 4: “Bill, you mentioned that Phoenix somewhat impacts the schedule being released. Does that mean or suggest the team won’t be playing there next year?”

Daly

Deputy NHL Commissioner
Bill Daly

Bill Daly (BD): Yes. It’s certainly possible the team won’t play there next year. Look at the short strokes in Phoenix now. The ownership group we’ve negotiated a deal with has been negotiating with the City of Glendale. I think everybody knows kinda what’s on the table. I think the puck is pretty much in the City of Glendale’s end with respect to how they want to deal with that.”

RQ 5: “Just to go a little further on Phoenix. Time is short. How much time do you have left? Why not have a deadline at some point?”

GB: “No reason to. It’s been a complicated process. In our minds understand that we’re dealing with a time frame. But a specific day isn’t going to do it but time is getting short and as Bill said, this is really going to be a decision that the City of Glendale is going to have to make.”

9:27 RQ 6: Stanley Cup questions

RQ 7: “Bill or Gary, I’m sure you have a Plan B or even a Plan C for Phoenix. But if they’re not playing in Phoenix next year will Quebec City, might be a Plan B or Plan C for the league?”

GB: We’re still focused on making it work with the Coyotes staying in Arizona. I don’t wanna begin a process, particularly publicly, with, where there’s gonna be a lot of speculation where the team might go, if it moved because all that would do would be to unfairly raise expectation in places and I don’t want to do that to fans in these communities. So we’re just going to leave it that we’re still focused on the Coyotes in Arizona.”

10:52 RQ 8: how were revenue earnings in a shortened season?

11:21 RQ 9: officiating during the play offs

13:38 RQ 10: Original 6 final game?

14:42 RQ 11: despite loss of 42% of season is NHL impenetrable?

16:53 RQ 12: low scoring in playoff games

RQ 13: “Does the Phoenix issue affect realignment at all especially if they have to move somewhere?”

GB: “Since one’s hope is that they’re going to stay where they are it shouldn’t and if the team is forced to relocate then we’ll have a look at it and make a decision as to whether or not it is impacted.”

18:19 RQ 14: concessions

19:51 RQ 15: after lockout will there be better revenues in the future?

RQ 16: “Two questions on Phoenix that perhaps Bill could answer. If we understand that you’ve got an ownership in place who will only take control of the team once the city council of Glendale strikes a deal, it seems that we’re working off a timeline that is controlled by the city council of Glendale. Is that correct?”

GB: “No. I’ll answer the question. The answer is no. At some point we’re going to have to make a decision.”

BD: “In other words, delay could be a no decision. Or no decision could be a decision in this case. So they understand. There’s no misunderstanding with respect to when our time table is vis a vis the city of Glendale. They know what our decision time line is and what are the decisions we have to make. There’s no misunderstanding on the parties.”

RQ 17: “You’ve spoken of keeping the team there and relocation. Does a third option of having the franchise in hiatus exist?”

GB: “There are a myriad of options and we’re not prepared to engage in speculation as to what the optionality (sic) is. The focus, at least for the time being, remains on having the Coyotes in Arizona. Obviously, we’ll have lots of choices, options and decisions and at the time, if we get to that point, and hopefully we won’t, then we’ll focus on which one is the best.”

21:40 RQ 18:  has a series with two of original 6 teams been achieved?

22:44 RQ 19: results of investigation into deaths of 2 NHL players

RQ 20: “Do you need a decision on Phoenix by the Board of Governors’ meeting on June 27th?”

GB: “Maybe. Are you trying to get me to set a deadline?”

RQ 21: “I’m just curious.”

GB: Listen. There’s a Board of Governors meeting on the 27th. There’s a city council meeting on June 28th.”

BD: “June 25th.”

GB: “I’m sorry. June 25th. Stuff’s gonna happen.”

24:10 RQ 22: world cup hockey

RQ 23: “Gary, question #15 on the Coyotes, if I may. You mentioned that you don’t want to make expectations in other places. Are there that many markets out there available that you could turn around and go to?”

GB: “There are a number of markets that have been expressing an interest to us over the years and the phone keeps ringing more regularly the longer that the Coyotes situation stays unresolved and based on the dates we just happened to talk about with the previous question, it’s causing the phone to ring even more.”

26:01 RQ 24: will acrimony of lockout be present and will GB present Stanley Cup?

26:28 RQ 25: will players participate in future world championship?

RQ 26: “If the phone is ringing about interest from other markets why is Phoenix still the best option for the NHL and can the franchise not just survive but thrive with new ownership?”

nealy

Mike Nealy

Maloney

Don Maloney

GB: “That’s a great question. So let me answer it in two parts. The first is, we try to avoid franchise relocation. We try to do everything possible. We don’t think it’s fair to fans and we don’t think it’s fair unless you have to move, to do it to communities that build you buildings. And so we’re not going to get involved in a bake-off where we’re gonna say, you know, we’d rather be here than there. We’re gonna try to preserve what’s in place. That’s what we’ve always done even when it’s resulted previously in franchise relocation. That only happens when we’ve exhausted all possibilities. We’ve now operated this club for about three years indirectly. We’ve had ownership of it. We’ve had great support by the people on the ground doing there. Mike Nealy and Donny Maloney in particular, have done a particularly strong job. We actually believe that if you gave the community an owner, not the league, who said, I’m committed to being here, this franchise could actively be successful from a business standpoint. We’ve seen what the fan base will do with all the uncertainty. We understand the dynamics from the business community and the broadcasters and the media and the people who buy suites and naming rights and all that stuff. If there was certainty surrounding this franchise its fortunes would improve dramatically and immediately just by virtue of putting in a real owner.”

BD: “No matter how this plays out I don’t think anybody can accuse us of a kind of grass is greener type approach to this. We’ve been committed to this market. We’ve done everything humanly possible to make this franchise work in this market. And now’s the time we’re gonna find out if that works.”

Glendale City Council

Glendale City Council

GB: “And again, when the obligation that we take so seriously, it starts with the fans and the community but for those of you who have been to the arena in Glendale, you know, I worry about what’s gonna happen to the arena if the team isn’t there. I think it’s likely to get boarded up because they’re not gonna have enough events to sustain it. I worry about what happens to Westgate and all the businesses and people who are employed there. I worry about the impact it may have on the football stadium, having a situation on its front steps that may not be ideal anymore and so we’re taking, we’ve taken all of those things into account over the last three years as we’ve tried to make it work. That’s why ultimately it’s up to the City of Glendale to make the decision that they think is in the best interest of their constituents and whatever they decide, we’ll abide by but ultimately whether or not this team stays at this point is their call.”

END OF PRESS CONFERENCE

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Jun 13

11

The joke’s on Glendale voters…

Posted by Joyce Clark on June 11, 2013
Posted in City Council Actions • City of Glendale • Glendale elected officials • Jobing.com arena  | Tagged With: , , , , , | No Comments yet, please leave one

agenda 1June 11, 2013 will be a regular Glendale City Council meeting. The agenda, however, is anything but regular. There are four items of special note. All but one item is under Consent Resolutions. Consent Resolutions means that unless an item is pulled by a councilmember for further discussion that item will be passed or rejected along with the 13 other consent resolutions and there will be no discussion – nary a peep out of anyone. The usual disclaimer prior to introduction of the consent resolutions is to say, “They are of a routine nature or have been previously discussed by council in a workshop session.”  Let me assure you two of the consent resolutions are not of a routine nature and have never been discussed publicly by this council. They are consent resolutions #13 and #14. Here is the link to council’s meeting agenda of June 11, 2013:  http://www.glendaleaz.com/Clerk/agendasandminutes/Meetings/Agendas/061113.pdf .

Both of these consent resolutions require doing business with the Tohono O’odham Nation. Item 13 is a grant request from the TO on behalf of the Aguila Youth Leadership Institute (http://www.aguilayouth.org/) in the amount of $112,100. The second item, item 14 is another grant request from the TO on behalf of Heart for the City in the amount of $100,000.

In the Staff Report, staff’s apparent rationale for doing business with the Tohono O’odham is that we have submitted for the same type of grants from the Gila River Indian Community.  So, if we could take grant money from the Gila River Indian Community then by golly, we should be able to take grant money from the Tohono O’odham. Between August, 2010 and June, 2011 the city received grants totaling $290,188 from the Gila River Indian Community. The funds were used by From the Heart, Boys & Girls Clubs of Metropolitan Phoenix and the Glendale Parks, Recreation and Library Department. The Gila River Indian Community have been one of our staunchest allies in the legal warfare with the Tohono O’odham since the issue of a casino IN Glendale (not near Glendale –darn it – but IN it) arose.

Is something missing? Have all legal issues between the City of Glendale and the Tohono O’odham been resolved? Are we suddenly buddies? Receiving grant money from a legal ally is far different than receiving grant money, no matter how well intentioned, from your legal enemy. It is the height of hypocrisy on Glendale’s part. I am ashamed that staff has brought these items forward. If I were on council and could take action at the meeting I would pull both items off of the Consent Resolution Agenda and speak directly to them and vote a resounding “no” on both – no matter how well intentioned they are. If council approves these two consent resolutions, where are this council’s principles?

Glendale City Council

Glendale City Council

Another Consent Resolution is more amusing in context. Item 8 calls for adoption of council’s Key Priorities for Fiscal Year 2013-2014. This one is a hoot! Council’s very first priority is, “Transparency internally and externally to assure the community that the decisions made for the well-being of Glendale are discussed openly with input invited.” Followed by their second priority, “Arena management, debt service, hockey agreement and enhanced revenues will play a large role in policy formation and financial strategy. The above noted transparency will be vital to gaining community support for decisions necessary to optimize the arena value to the Glendale community” (Italics mine). It appears that we all have missed something in council’s translation of transparency.  It looks like council’s definition of transparency is not what the general public assumes it to be. We certainly haven’t seen much transparency when it comes to the Beacon RFP process or Renaissance Sports and Entertainment Group’s discussions with city personnel or council.

greed 1Which brings up our last target of incredulity, Item 21, Fiscal Year Budget Amendments, as an Ordinance to be adopted. I love numbers. While most people won’t go to the numbers pages and really read them. I always do with gusto because they are so revealing. These amendments are transfers from one hand in the budget into a different hand in the budget. The transfer is from Contingency (you know, the “rainy day” account the city is trying to rebuild) to the City Manager’s Office.  In this case, did you know that this council is paying $500,000 for the Council Special Audit? Can you imagine it? Half a million dollars on a special audit – an audit whose primary purpose is to fix blame on somebody. Let’s hope they find a half million dollars worth of blame because they certainly are not going to find a half million dollar pot of gold at City Hall.

The council is also spending another $100,000 on the Arena RFP Process run by their hired consultant, Beacon Sports.  We all thought Councilmember Alvarez wanted to “get rid” of all the consultants? Not so. They must be OK if they are consultants that serve her purposes. Remember, this RFP process is the same one that NHL Commissioner Gary Bettman characterized as “silly.” All of this comes from a council which, when 4 of them were running for office, ran around wringing their hands, complaining about the previous council’s fiscal irresponsibility and vowing it would never occur again because their mission was to be fiscally accountable and transparent about it all. Looks like the joke is on you, Glendale voters.

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