Header image alt text

Joyce Clark Unfiltered

For "the rest of the story"

cit mtg 2On the evening of April 1, 2013, the City made a public presentation of the state of its budget to the public. If you include myself and the councilmember representing our area there were a total of 5 people in attendance. That’s right. Three citizens and us. How embarrassing for the councilmember. Oh, but that’s OK. His only constituency these days is the fire fighters union.

staff multiplied jpgIn terms of city staff, it would be safe to say the citizens were outnumbered at least 3 to 1. There was at least 20-25 staff in attendance. Every director of every department was on hand to answer the flood of citizen questions (not), in addition to 2 of Glendale’s cable channel 11 TV crew filming the non-event. It almost begs the question as to why doesn’t the city ask the general public to RSVP? If a minimum number of citizens respond, the meeting is held. If only 2 or 3 respond, the meeting could be cancelled. After all if the public meeting had been cancelled, it would have only required calls to 3 people.

These staff members are salaried and not paid time and a half for extra duties such as attending this meeting.  These salaried personnel, if they so choose, can compensate themselves for the time by coming in to work a little later or taking a longer lunch break. It is an option available to them should they choose to use it. Many of them do not and put in more than a standard 40 hour work week.

Ms. Schurhammer, Executive Director of Finances, made a 15 minute presentation on the city’s budget. She concentrated on the city’s total Operating Budget by Fund and Department and the General Fund Budget by Department.  She pointed out that 34% of the city’s entire budget and 63% of the city’s General Fund budget goes to Public Safety. There was virtually a silent scream from all non-public safety staff asking how much more does Public Safety need? We’ll get to that in a minute.

Back in December, 2012, both the Fire and Police departments had their respective budgets balanced and were prepared for a vote of approval from the sitting council at that meeting. However, Vice Mayor Frate made a motion shark 2that their budgets be tabled and brought up again when a permanent City Manager was hired. The vote was 6-1 with me being the lone, dissenting vote. That action left their budget departments” doors open just a crack. Now, sensing an opportunity, they are smashing open those doors with a fire truck and tactical vehicle. They sense blood in the water and this new council (led on this issue by Councilmember Chavira, a Phoenix firefighter) is willing to give them everything and anything they want. Chavira will take care of his brothers in Glendale and we can only guess that Phoenix Councilmember Danny Valenzuela (a Glendale firefighter) will take care of his brothers in Phoenix.  Sweet, isn’t it? It has a nice, quid pro quo ring to it, doesn’t it? Note that the city does not have a permanent City Manager. Yet he will have to deal with the largesse that this council dispenses.

cit mtg 1After Ms. Schurhammer’s presentation, Ms. Julie Watters of the city’s Media and Communications Department, led the meeting by asking if there were any public comments. Mind you, a citizen could not ASK a direct question, only comment. If anyone had a question, they were directed to talk to that specific department director after the meeting. This is a tried and true practice that Glendale has practiced for years and which I have hated for just as long. For you see, if the question is a difficult or uncomfortable one, the answer is made only to the citizen seeking the answer after the meeting. After all, the city wouldn’t want all those citizens hearing that awkward answer to that difficult question. Would it? It’s a divide and conquer strategy that I believe is unfair to the citizens of our community.

cooler 3What were the water cooler musings? Several sources echoed one another. Much of it, dear reader, is old news for I have blogged about it previously. Nevertheless, here goes:

  • The Coyotes will be sold this month by the NHL.
  • The idea of 4 separate arena management contracts (you remember…hockey, entertainment, education and cleaning) still has legs and is not dead.
  • The general consensus is the Coyotes will be leaving Glendale as the city and the new team owner will not be able to come to mutually satisfactory terms on the arena lease management contract.
  • Or the other theory is that the team will stay in Glendale briefly (2-5 years) and then relocate.
  • This new council has no will to make the necessary and needed cuts over the next 4 years and likely will not sunset the temporary sales tax increase in 2017.

super bowlAll departments will struggle to come up with adequate funding to support the hosting of the 2015 Super Bowl in Glendale. Further diminishment of citizen services may be the only way to fund the costs.

 

 

 

copyright

Leblanc

Anthony LeBlanc

board-gosbee

George Gosbee

For the past few days there has been a flurry of media reportage on a new player in the ongoing Coyotes ownership saga. According to the media Anthony LeBlanc, a previously failed would-be owner of the Coyotes, has landed a “whale.” That, I have learned, is a term used to describe someone with oodles of money. That does describe George Gosbee, a very rich Canadian indeed.  You don’t become a very rich Canadian by being dumb. Mr. Gosbee’s background is finance and not hockey. Although it certainly is possible that he is a hockey aficionado. Mr. LeBlanc must have pitched a smokin’ return on investment (ROI) to Mr. Gosbee, et al. We can only guess as to the money making strategy proposed by LeBlanc to line up his investors but it must be a doosey!

Jamison

Greg Jamison

We know that Greg Jamison is still in the hunt and has been working quietly to reassemble an investment group. It’s no secret that I have championed the possibility of his ownership of the team because I know what he stands for and that is a long-term commitment to the team and Glendale. If he fails this time as well, I will welcome any ownership group that makes the same commitment and honors it.

Image2

Darin Pastor

Now, like wild flowers springing up from the desert floor, another possible investment group led by Darin Pastor has surfaced and issued a March 29 Press Release announcing the formation of “an exploratory committee of seasoned investment bankers and other related sports entertainment advisers”  to purchase the Coyotes. This group, as well as all of the others, has proudly proclaimed their intent to remain in Glendale.

reinsdorf

Jerry Reinsdorf

There is also the possibly of Jerry Reinsdorf, with his Beacon Sports connections, lurking about like a Great White Shark, waiting to strike.

I think I’m beginning to see a pattern emerge. Color me paranoid or suspicious. That’s OK. Just take a moment to think about the current situation. We know of a minimum of three groups seeking to purchase the Coyotes. In the scenarios of previous years, the city waited UNTIL the NHL had given its initial blessing to any of the would-be owners and THEN began negotiations on a final arena management contract. If any of those negotiations had proven successful the new owners would have then finalized a sale with the NHL.

Bettman

Gary Bettman

This time it is different. It appears that the NHL will finalize a sale of the team FIRST and THEN the new owners will begin negotiations with the City for a lease management agreement. It certainly puts the ball in this new council’s court. From everything we have seen and heard to date, this is a council that wants a cheap arena management contract. They have simply not indicated a willingness to offer a deal similar to the one that Greg Jamison had. Yet Anthony LeBlanc has said publicly that any deal with the city must be very similar to the previous deal on the table with Greg Jamison.

So there may be an impasse and the new team owners and the city may not be able to craft a deal satisfactory to both sides.  If that occurs, we will have new team owners that can relocate the team and a city willing to let the team go and settle for an arena manager of the Phoenix Monarch Group variety.

question 2Under those circumstances, as a possible owner of the team, anyone would be more than willing to publicly state an intent to keep the team in Glendale long-term. It’s a good PR move and wins the hearts and minds of many. Then upon failure to come to terms with Glendale, saying with a straight face and convincingly claiming it was the city’s fault. The critical question that all should be asking, is not who will buy the team for I am convinced the team will be sold and soon. How soon? Who knows? Once again, we heard the magical phrase of “two weeks.” The critical question is, will Glendale come to terms similar to previous deals and finally acknowledge that the team as an anchor tenant at Jobing.com is indeed important to Westgate’s future? That’s the real sixty four thousand dollar (or $6M or $10M) question.

copyright

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?

copyright

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.

 

 

copyright

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.

 

copyright

 

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.

 

copyright

Both the Jehovah’s Witnesses and the Tohono O’odham were discussed at the Glendale City Council workshop of March 5. 2013.

jobing.com arena

Jobing.com Arena

Up first, the Jehovah’s Witnesses who would like to use Jobing.com, the city owned arena, for 4 weekends (or events) in July, 2014. Apparently the city is considering sponsoring this group’s series of meetings as a means of increasing bookings at nearby hotels and ginning up restaurant revenues in Westgate during the doldrum days of summer. It’s a good idea on the face of it. Now, I certainly have no problem with the Jehovah’s Witnesses using the city owned facility. Anyone and everyone are welcome to its use if they can afford to do so. Apparently this group cannot.

Let’s look back at the previous experience of hosting this group and take a moment to separate fact from fiction. The group did not pay all of the previous costs associated with use of the arena. It is my understanding that they paid only $5,000 in rental. That is the reason why this time the arena management contractor is requiring a rental fee of $30,000 to cover its costs of staffing, equipment usage and cleanup. It was also reported during previous city council discussions regarding this issue that usage of the restaurants by this group was minimal at best; the participants preferred to “brown bag” it for meals. I also doubt the claims of usage of the Westgate Renaissance Hotel, a 4 diamond hotel. Again, it was pointed out in previous council discussions that the participants used less expensive accommodations in the surrounding Metro Phoenix area.

So, what’s going on? Could it be a form of payback? The former mayor apparently wanted this group to use the arena as aquestion mark means of demonstrating that the arena could survive without the Coyotes. She may have assumed that hosting this group at the arena would generate oodles of sales tax revenue for the city, proving her assertion that the city does not need the Coyotes as an anchor tenant. She publicly endorsed the current mayor’s candidacy. Would he do a favor for the person responsible for his success in his election? I don’t know. You will have to judge for yourselves.

Let’s take another look at what constitutes an event, shall we? The city wants the arena manager to accept a weekends’ worth of days as a single event. The city’s interpretation of an event as being comprised of multiple days would allow the group to use the arena for four consecutive weekends.

event 1The Arena Lease Management Agreement signed in November, 2001, clearly is a contract that the city has relied upon to support its point of view on numerous occasions. Under Section 5.16 of the agreement it spells out that, “the City shall have the non-assignable right to use the Arena Facility (other than Exclusive Team Spaces) for not to exceed four (4) Events (each a “City Sponsored Event”) each Fiscal Year (i) which is sponsored or co-sponsored by the City; (ii) which may feature performers or performances which are normally booked in arenas comparable to the Arena Facility; and (iii) for which admission may be charged, all as determined by the City in its sole discretion (page 45).”

First question for discussion is what is an “Event” and is it defined? Well, yes it is. Under Article I. Definitions and Interpretations, page 10, “ ’Event’ means any revenue or non-revenue producing sports, entertainment, cultural or civic event or other activity (including related event set-up and take-down) which is either (i) presented or held in the bowl (main seating) portion of the Arena Facility, or (ii) presented or held in any other portion of the Arena Facility in a manner that precludes the use of the bowl (main seating) portion of the Arena Facility for other events or activities. If such an event or activity is presented in its entirety more than once during a given day, all such presentations during such day shall be deemed one Event. If such event or activity is presented in its entirety on more than one (1) consecutive day, each day on which such event or activity is presented shall be deemed a separate Event  (Italics and bold mine). For purposes of this paragraph, any event or activity that commences on a given day and is completed within the four (4) hours immediately following the end of such day shall be deemed to have been presented in its entirety on the day such event or activity commenced.”

It seems that the intent of this provision when it was written and accepted by all parties is pretty clear. The city can host 4 events a year. If an event consumes multiple days, each day is considered to be one of the 4 allowable days per year. It will be interesting to see how the city wiggles and tries to broaden this contract’s definition of an event.

The other issue associated with the city’s hosting of this group deals with the costs of the event. Also under Section 5. convention 316, it states the following, “The Arena Manager shall maintain separate records of all Community Event Expenses, and all amounts received for deposit and deposited into the City Parking Fee Account and the Arena Recovery Fee Account with respect to each Community Event. The Arena Manager shall, at the time the monthly financial report for the month during which such Community Event occurs is submitted to the parties hereto pursuant to Section 5.3.3(b)(i), submit an invoice to the City for reimbursement for the amount of such Community Event expenses. The City shall reimburse the Arena Manager for the amount set forth in such invoice within thirty (30) days after the date of such invoice (page 46).”

If the city can get past the vexing issue of what constitutes an event–one day or multiple days– it still must deal with the cost of hosting the event. During workshop council was told that the group can pay only $5,000 per event and they could not afford the $30,000 rental fee that would normally be paid. But the cost to use the arena still remains $30,000 per event. That means that the city would be billed for the difference and would have to pay that difference of $25,000 per event. For 4 events that totals $100,000 to the city as the cost of subsidizing four events. This can only work if the events bring in excess of $100,000 in sales tax from Westgate. I don’t believe that’s possible unless the group, quid pro quo, agrees to book all nights at Westgate hotels and to eat at only Westgate restaurants. That is not likely.

The city continues to experience financial difficulties and Councilmember Alvarez and others have called for more money to be expended on pools and libraries. Every city expenditure remains on the table for possible future cuts and has to be weighed as to its priority. So, Councilmember Alvarez, is your priority to spend up to $100,000 to subsidize this groups’ event?

As for the casino and the Tohono O’odham, another feisty topic of that council meeting, it will have to wait for Part II.

copyright