The Glendale Monthly Arena Report for March, 2014 is now online at the city website. Here is the link: http://www.glendaleaz.com/finance/documents/FY14MonthlyArenaReport-20140331.pdf . It tracks similarly to the previous reports with qualified ticket sales (of 14,061) being up slightly. April’s report will have the figures from the last 5 games. That report, also, will look quite similar. Here is the March Report:
I have also prepared a Summary of the last 7 months’ worth of financial information. Here it is: Take aways from the Summary show that all “enhanced revenues”, and I included the Supplemental Qualified Ticket Surcharge of $1.50 per ticket, to date have totaled $3,641,547. The city’s expenditures to date total $6,502,055.
Note that some items are prorated. The Agreement start date was August 5, 2013. It is one month and 4 days shy of a full fiscal year. As a result, the Base Rent for the first year is not $500,000 but rather $326,712. The Safety & Security Fee is not $174,122 for the first year but rather $156.948. The big one is the Management Fee the city pays of $15 million a year. The first year it is $13,750,00.
The extreme right column labeled “FY Est.” is an educated guess, based upon 7 months of fiscal performance to date, of the final numbers for the Fiscal Year. I have relied upon publicly available figures. The Fiscal Year estimated revenues to the city are $5,523,000 and the expenditures are $14,200,68.
The city has $6 million budgeted leaving it with a deficit for the year of $8,677,685. Add to that figure an annual construction debt payment of about $12 million a year. This year’s loss on the arena will come in somewhere around the $20 million mark.
The city’s Contingency Fund sits at zero as it was used to pay a portion of the management fee. If there is an immediate crisis the city will have to reapportion some regular line item amount to cover it. I’m sorry but I don’t see how the new senior management has done any better at managing the city’s money than the old regime. No matter what, the current situation is…Unsustainable.
© Joyce Clark, 2014
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The Monthly Arena Reports does not even ‘jive’ with the Follow Your MONEY figures posted, which are suppose to be ‘up to date.’
Under the arena contract, revenues are suppose to be ‘reported’ anywhere from 2 to 15 business days upon collection.
As an example,the Sales Tax Collections are off by almost $300,000 and last quarter’s parking revenue should have been posted to FYM by April 15.
The city manager and/or city attorney is not managing this ‘professional services’ contract very well.
I don’t know what you mean when you say the sales tax collections “are off by almost $300k”… the sales tax collections listed in the monthly reports do indeed add up to the $800k listed, so off relative to what?
And why are you expecting parking revenue paid in April to be included in a financial report covering the month of March?
fishbert, for Sales Tax Collection, comparison is between MAR and FYM (re-read my first sentence) and is relative as to whom is over/under reporting.
Re-read the MAR footnote #4 on parking revenues which should have already been reported on FYM – the city’s ‘real-tme’ reporting system.
The first quarter’s (December) parking was posted on FYM before it was on the January MAR which was not released until the end of February.
This web site, icearizona.org, appears to be tracking this and other information.
So, fishbert, do you think anyone, on either side, is really managing this contract very well?
On the Follow Your Money website, there’s a phone number provided if you have any questions regarding the information contained within. So, I called that number and asked them about the difference between the sales tax revenue figures.
The explanation I received was that the $500k amount listed in FYM was sales tax revenue applied to the general fund, while the $800k amount listed in the monthly arena reports also includes the public safety and transportation sales taxes (monies that go into their own special revenue funds, not the general fund). If you look at what portion of the overall sales tax rate the public safety and transportation sales taxes are responsible for, it lines up with the ratio of $500k vs $800k.
I didn’t ask about the parking revenue (seemed the lesser of the two questions), but feel free to call that number and ask them yourself if you want the answer.
To answer your direct question at the end, yes… after speaking with them regarding the sales tax discrepancy, I do think that both sides are quite on top of managing this contract. We are in quite the catbird seat with a searchable city finance database and publicly-posted monthly arena reports; I haven’t even had to fill out a single FOIA form for all this metrics data!
Grave and ugly for us tax payers. time to sell arena and baseball fields and stay out of sports
Something to keep in mind here is that the arena has only had 6 non-hockey events under this management deal so far. Non-hockey events take a lot of lead time to schedule, and I would expect it to grow considerably going forward (3 are already scheduled in August alone). This management deal is definitely unsustainable on the back of hockey events alone (which is basically all there is in this first prorated year); this management deal will live or die based on how much non-hockey events bring to the table.
When this management deal was before the City Council, the nay-sayers liked to focus on a $15M/yr cost (completely ignoring any revenue coming back because it wasn’t “guaranteed”), and the supporters liked to focus on a $6M/yr cost (completely ignoring any risks and blindly assuming revenue success). Though there is definitely room for improvement, it’s better for Glendale that the final 1st year arena management cost appears to be much closer to the $6M figure than the $15M figure.