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Joyce Clark Unfiltered

For "the rest of the story"

Disclaimer: The comments in this blog are my personal opinion and may or may not reflect an adopted position of the city of Glendale and its city council.

On Tuesday, June 13th at the regular Glendale City Council voting meeting, a majority of 5 voted to approve the proposed budget for FY 24-25. The 5 members voting for its passage were Mayor Weiers, Councilmembers Aldama, Clark, Hugh and Malnar with Councilmembers Tolmachoff and Turner voting no.

Is any city budget ever perfect? Will it please everyone? Obviously, the answer is no. Out of the hundreds and hundreds of items within the budget, Councilmember Tolmachoff objected to expenditures regarding 4 items: the Downtown Campus Renovation Project, Heroes Park Sports fields, the Veteran’s Community Project, and covered parking for our city attorneys.

She has every right to disagree and to voice her concerns and to make arguments in support of her positions. Every councilmember has that right and exercises it freely. Councilmember Tolmachoff advocated for her positions during the 3 months of intense council budget review as well as during council workshop discussions of the proposed budget. Her arguments were not enough to create a majority of council in support her positions. The fact that her arguments on these 4 items did not prevail should not have been so compelling as to cause her to vote no on the entire budget.

Councilmember Tolmachoff chose to ignore the countless positive elements of the budget. Items such as $12 million dollars for new fire trucks or funding to improve every right of way within the city or our continued commitment to treat every street and to renovate our city parks.

Councilmember Tolmachoff’s objections were on the use of the city’s unassigned fund balance for downtown renovation, Heroes Park sports fields, the veteran’s community project and covered parking for city attorneys.

The city’s fund balance has grown over the past few years due to all the construction sales tax generated by development in the Loop 303 area. She wants a lion’s share of those funds to stay in the unassigned fund balance (think of it as a rainy-day fund to be used in emergencies).

In a very recent workshop finance staff stated that the Government Finance Officers Association (GFOA) recommends a budgetary fund balance in a city’s general fund of no less than two months of regular general fund operating revenues or regular general fund operating expenditures. Staff went on to recommend changing the current policy of a minimum unassigned fund balance in the general fund to 25% of budgeted ongoing expenditures. A majority of city council concurred because it is a prudent strategy.  Every Valley city has a similar policy with the percentage of fund balance retained ranging from 1% (Phoenix) to 35% (Avondale and Peoria). Keep in mind that our bond agency ratings are excellent. If we were doing something unwise, believe me, the bond agencies would downgrade us immediately.

Consequently, the city has excess funds that can be used for one-time projects. A one-time project is usually, although not always, a construction project. The 4 projects that Councilmember Tolmachoff opposes are all one-time projects. Please note that there is some hypocrisy on the part of Tolmachoff. She does not mind using fund balance for transportation projects which are her priority. Hmmm…

She opposes the cost of renovating the city hall, Murphy Park, the amphitheater and council chambers. This is a long needed and great project. It is the one project that may do more to revitalize downtown Glendale than anything else. As a result of the council’s decision, CivicGroup, LLC. Is planning to build a 120 room hotel adjacent to the Civic Center. A new pub is hosting its opening this week and our Economic Development Department has received numerous calls from developers seeking to invest in our downtown. It seems that our downtown campus renovation project will be the catalyst to bring new life and new businesses to our downtown. It will also help to recruit and retain employees by providing workspaces of today, not 40 years ago when city hall was built.

She opposes the Heroes Park sports fields construction despite a 25-year promise by the city to complete this park. Heroes Park was designed and intended to bring amenities, such as sports fields for our children, enjoyed by other parts of the city to south and west Glendale.

She opposes the Veteran’s Community Project. This project will provide interim housing to veterans as they work their way through various systems to obtain counseling, health services, a permanent job and housing. It is a pilot project that has already drawn interest from other Valley cities that may replicate Glendale’s effort in this area. A majority of council considers this a very worthwhile project that assists a long-neglected segment of our society.

She opposes a covered parking structure for our city attorneys even though it is recognized that it is a retention tool for our current staff. For years the city attorney’s office was in city hall and its staff parked in the city parking garage. With their recent move, they no longer have access to covered parking.

She doesn’t want any of these projects but it’s OK to use the funds for her priority, transportation projects. In a recent article she said, “My plea to the mayor and council to fully fund the transportation plan this fiscal year with cash on hand (fund balance) was met with a resounding no from the majority.” The majority instead identified other projects, long ignored, that warranted funding intended to improve the quality of life for every resident.

City Council adopted a ten year plan to treat all streets. As needed, Council’s plan has been modified and instead of spending $10 million dollars a year, the minimum amount per year has risen to $17 million dollars a year reflecting a total of $450,781,427 million dollars over the next 10 years. This total amount is dependent upon voter approval this Fall of the Transportation Bond authority. However, the planned total for transportation can hardly be considered as underfunded.

Councilmember Tolmachoff literally “threw the baby out with the bath water” because her advocacy for 4 items was not accepted by a majority of the council. The fact that her arguments on these 4 items did not prevail should not have caused her to vote no on the entire budget. It reminds me of the saying, “my way or the highway.”

Councilmember Tolmachoff did not show responsible leadership. A true leader would not attempt to encourage other councilmembers to defeat the city’s entire budget and throw the city into chaos 17 days before the start of the city’s new fiscal year. The results would have been like Congress’s failure to pass a budget before their deadline. A leader recognizes and accepts defeat and works to achieve consensus with colleagues to achieve future wins.

© Joyce Clark, 2023     

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such material. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Disclaimer: The comments in this blog are my personal opinion and may or may not reflect an adopted position of the city of Glendale and its city council.

I haven’t written a blog in quite some time but I have a good excuse. The city council has just gone through its budget season which consumed our lives. In an effort to “do my homework” I have spent countless hours studying hundreds of pages of budget material. In addition to creating city policy the annual budget is the most important council activity.

Money is the life’s blood of our lives. If we have enough, we’re comfortable. If we don’t have enough, we’re miserable. Money is the life’s blood of all governments, from local to federal. Who ever directs its spending has the power.

The Glendale City Council has had 9 meetings since January building its annual budget.  For Fiscal Year 21-22 Glendale’s total budget is $1.242 billion dollars. It breaks down as follows:

  • An operating budget of $730 million dollars or 59% of the total budget. The police and fire budgets consume most of the operating budget coming in at 66%. This budget convers all employee salaries and benefits, all supplies, and all usual day to day equipment (such as computers and phones) and all minor purchases and contracts needed to operate (such as building cleaning services). In addition to employee salaries and benefits and public safety it convers such services as community services and transportation.
  • Our capital improvement budget totals $280 million dollars or 28%. This budget is used to construct new amenities such as Heroes Park Lake and the O’Neil Splash Pad and to repair and maintain all sorts of things such as a fire station, a park irrigation system, the adult center entry way or repainting Sahuaro Ranch fencing. It covers items such as streets, the airport and transit.
  • The contingency budget is $139 million dollars or 11%. Our contingency funds are just that. For example, the council approves a construction project that totals $500,000 but it turns out that lumber prices have tripled. Yet the council approved allocation is that $500,000. Contingency can be used to cover the costs associated with the rising and unexpected costs of materials.
  • The debt budget is $93 million dollars or 7%. It not only convers the debt on the arena and spring training facility but debt arising from the capital improvement program.

Some of the departmental highlights within this year’s budget include:

  • Community Services will continue to provide pass through services for the distribution of federal Covid funding for emergency rental and utility services.
  • Development Services will see the addition of 3 new inspectors to handle the tremendous amount of new construction we see at the Loop 303 and elsewhere throughout the city.
  • The Fire Department will add a second federally granted funded Medical Response Unit and will get new and replacement turnout gear.
  • The Police Department will provide cell phones for all sworn personnel and institute a drone program as a tool to combat crimes in progress.
  • The Public Facilities, Recreation and Special Events Department will see Heroes Lake constructed this year in addition to upgrades to 3 community centers and Foothills Recreation and Aquatics Center along with park restroom replacements and the addition of a mid-city splash pad.
  • The Facilities Department will oversee City Court, Glendale’s Operations Campus, and amphitheater renovations.

There are two fiscal issues that should be noted. The Arizona Legislature will likely pass a presumptive fire fighter cancer bill. This means all fire fighter cancer claims will be automatically presumed to have occurred while being on the job. Previously a fire fighter had to provide proof that the cancer was the direct result of working as a fire fighter. Now, cities will have to prove that the cancer did not occur because of that work. In other words, all fire fighters’ cancers will have to be covered by cities. This new fiscal burden will add millions of dollars of liability to each and every city in the state.

Another legislative bill under consideration is the reduction of state shared income tax paid to all cities and will be a substantial hit. This will reduce the amount of state shared revenue received by every city in the state. So, at a time when the legislature is adding another fiscal liability by requiring all cities to cover all fire fighter cancers it is also reducing the amount of money received by reducing the income tax payments it shares with all cities. Don’t be surprised if some small cities and towns find themselves on the verge of bankruptcy. These legislative mandates are unsustainable.

The good news is the Glendale city council has achieved a balanced budget for Fiscal Year 21-22 which begins on July 1, 2021. There are many elements within it that will upgrade all of Glendale and add amenities unable to be achieved due to the past recession. You will see parks that look and feel better. You will see roads that continue to receive pavement management or reconstruction of major arterial streets. You will see the city continue to assist those in need because of Covid. You will see neglected city facilities receiving long overdue repairs and upgrades. You will see a better Glendale.

© Joyce Clark, 2021       

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such material. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Disclaimer: The comments in this blog are my personal opinion and may or may not reflect an adopted position of the city of Glendale and its city council.

On Friday, April 28, 2017 Glendale city council had another all day budget workshop to continue its review of departmental budgets. Here’s how these department budget totals lined up in terms of total increases or decreases over the Fiscal Years of 2016-17 and 2017-18;

  • Budget, Finance and Non-Departmental     64.76% decrease                                           (this is an anomaly explained by the removal of two line items, Arena Events and the AZSTA stadium tax refund). In actuality this department will see a 6.24% increase in this year’s proposed budget.
  • Public Facilities and Events                         10.10% increase
  • Economic Development                              20.59% increase
  • Public Affairs                                               7.27% increase
  • Office of the Mayor                                      8.9%  increase
  • City Council Office                                     17.06% increase
  • Innovation and Technology                        13.60% increase
  • City Manager’s Office                                  2.15% decrease
  • City Clerk                                                 35.75% increase 
  • Water Services (Enterprise Fund)                 5.21% increase
  • Public Works (Enterprise Fund)                    3.17% increase

Budget, Finance, Non-Departmental. The issue within this department’s budget continues to remain the acquisition of and implementation of a city-wide ERP system called Munis. For years the city has utilized a system called PeopleSoft. From what I have heard some PeopleSoft modules were never fully implemented nor was staff adequately trained on the use of some of its modules. In addition, a year and a half ago the city paid $1.2 million to upgrade the Human Resources component of PeopleSoft. Oracle, the parent company of PeopleSoft has announced that it will continue to support the PeopleSoft system until 2027.

Staff contends that PeopleSoft requires a great deal of manual input and output with modules that cannot be tailored to the city’s needs in the 21st century. It, with the assistance of a consultant, has identified a system called Munis, tailored to the needs of local governmental needs. The cost of acquisition and implementation is $6 million over 3 fiscal years. While I believe they have made a case for acquisition of the Finance modules, I am not convinced that the abandonment of the HR PeopleSoft system, recently upgraded, is critical and warranted right now. Further discussion of this item will occur at council’s next budget meeting of Tuesday, May 2, 2017.

Public Facilities and Events.  A great deal of council conversation continues to center on the Convention and Visitors Bureau (CVB) and its use of the city’s bed tax revenues. My question continues to be why does it cost the city $407,602 to administer this tax? Up until now the CVB has concentrated its advertising dollars (funded by the bed tax) toward a select group of downtown businesses. Council indicated quite clearly that advertising of downtown businesses must be more inclusionary and that advertising dollars should be directed to all businesses in Glendale rather than just the downtown core.

Economic Development. The major conversation was the acquisition of a Downtown Manager for $125,000 annually. A Request for Proposals was issued and the contract will be awarded to the Glendale Chamber of Commerce.  Major deliverables in this contract include the establishment of a downtown merchants’ association and a full and complete current inventory of all downtown properties. While these are major tasks if they are not or cannot be accomplished during the contract’s first year the contract could be terminated.

Public Affairs.  The realignment of departments under the new City Manager Kevin Phelps created this new department. Its focus is primarily public relations for the city. Within this department is the city’s cable TV division. If you are a Cox subscriber you have the opportunity to visit Channel 11 to see some award winning programming.

Office of the Mayor and City Council Office. The Mayor and City Council are the most visible representatives of our city. We serve in so many ways: representation of the city on national, regional and local levels; we are your voice and our prime directive is to represent your interests and concerns; and we make policy decisions for the entire city. During the recession these two divisions, just as all other departments, reduced the number of support staff making us lean but not so mean. Since my last service as a councilmember in 2012 and my return in 2016 I am surprised that elected officials’ duties and responsibilities have increased significantly. When I returned to council I staffed myself for the first four months. I was able to experience, up close and personally, how much work a council assistant must perform. Yet a council assistant staffs two councilmembers. It is an impossible situation. The move toward a council assistant for each councilmember is long overdue.

Innovation and technology. This is an area that merits further scrutiny. Many departments now have their own IT support or pay for it annually as part of a licensing contract for specialized software. Training on new software is often also included in the purchase of specialized software. Has our IT department become no more than glorified support for the city’s vast numbers of personal computers at work stations? I don’t know but it is an area that deserves in-depth discussion by council.

City Manager’s Office. The city manager sets an example for the entire city and a reduction in his budget is symbolic for the organization. He is demonstrating that more can be done with less in some circumstances. Mr. Phelps has demonstrated his abilities to tackle tough issues and to create new initiatives that will benefit the city over the long-term.

City Clerk. While election season takes a brief hiatus (at the end of this year, 2017, candidates for the Ocotillo, Barrel and Cholla city council seats will be able to take out nominating petitions) the City Clerk’s election budget shrunk to $2,000. Yet in this information age, the number of documents, contracts, correspondence, etc., has exploded. Most of these materials must be retained per state or city policy.  The increase in this department budget is to meet this need.

Water Services and Public Works. These areas are Enterprise Funds meaning they rely upon residents’ use of and monthly payment for these services. Their revenues are your monthly payments for water, sewer, sanitation and landfill. These departments are the worlds of engineers. They understand numbers. As a result, their budgets are very clean and comprehensive. It’s always a pleasure to review these departmental budgets because they are so clear. There are two major initiatives in these areas. During the recession, water services delayed many major repair and maintenance projects. There is now the opportunity to address these issues and in addition, an opportunity to plan for future needs by beginning to build redundancy into the system of water delivery. Public works’ major initiative now and for the next 5 years is the pavement management program. Over the next 5 years the entire system of streets in the city will receive some form of remediation, long over-due. In addition, a suggestion I made will also be implemented by changing the city’s street lighting to LED will save the city approximately half a million dollars a year.

The next budget workshop is Tuesday, May 2, 2017 and begins at 1:30 PM. It had originally been scheduled for 9 AM but a change to the afternoon became necessary. If you would like to watch this workshop you can view it on Cox TV cable channel 11 or online at www.glendaleaz.com, at cable channel 11.

© Joyce Clark, 2017               

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such material. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

It has been 17 years and 309 days since the city’s pledge to build the West Branch Library.

PLEASE NOTE: SINCE THE INCEPTION OF MY BLOG I HAVE REACHED ANOTHER MILESTONE. AS OF NOVEMBER 4, 2015 THERE HAVE BEEN OVER 300,000 READS OF MY BLOGS. MY THANKS GOES OUT TO ALL WHO HAVE SIGNED UP TO RECEIVE THEM ON A REGULAR BASIS AND A SPECIAL THANKS TO ALL WHO HATE MY COMMENTARY BUT KEEP COMING BACK TO FIND OUT WHAT I AM SHARING ABOUT GLENDALE AND ITS PLAYERS.

On October 20, 2015 at city council workshop council was presented with a menu of city properties that could be sold. Amazingly, not one…let me repeat that, not one property was put on the block.

Cushman & Wakefield, the city’s consultant, proposed the possible sale of nine city owned facilities:

  • Water services lot at the northeast corner of 99th Avenue and Bethany Home Road for $7.5 million
  • Glen Lakes Golf Course at 54th Avenue and Northern Avenue for $5.2 million
  • Desert Mirage Golf Course at 87th Avenue and Maryland Avenue for $450,000
  • St. Vincent de Paul Thrift store in downtown Glendale for $300,000
  • Thunderbird Lounge and adjoining properties in downtown Glendale for $545,000 to $727,000
  • Bead Museum in downtown Glendale for $400,000 to $500,000
  • City Court site in downtown Glendale for $3 to $5 million
  • Bank of America building in downtown Glendale for $7.35 million

The only properties that can legitimately be taken off the sales block are the two golf courses. Desert Mirage Golf Course has long term contractual obligations that could prove problematical and Glen Lakes Golf Course land would be used for residential development that would violate a long standing commitment to every home owner surrounding the property. In addition, these two properties offer a genuine amenity to every Glendale resident.

So, why won’t council sell off any of the downtown properties? Well, we might use them sometime in the future…the very distant future. Or we can’t sell them because the sale price is less than the city paid originally. Reality…since the Great Recession, many properties nationally and regionally have sold for less than their purchase price.

Each of these properties, vacant or developed, have annual operating & maintenance (O&M) costs. What is the total annual O&M cost to the city for each of these properties? If they were sold the city would no longer have to pay the O&M costs in addition to receiving the purchase price.

The sale of these properties accomplishes several goals. It takes the annual O&M costs off the books permanently. It earns the city an estimated $20 million plus. These funds should go directly into the city’s Contingency Fund (Unappropriated Fund Balance).  That, in turn, would take pressure off of putting every available nickel in the General Fund into Contingency. It would create the opportunity to utilize General Funds for needs long ignored since the Great Recession.

The sale of these properties also creates a major benefit for downtown Glendale. How many Task Forces, over the years, have made recommendations for the revitalization of downtown Glendale? Too many, going all the way back to the Miracle Mile Citizen Task Force. What has been achieved as a result? Nothing. In one fell swoop, with the sale of these properties the city has the opportunity to kick start downtown’s revitalization. No one is going to buy a downtown property without plans to develop. That’s illogical. An investor in a downtown property expects a return on that investment and that can only occur with the development of the investment. The beneficial and productive use of these properties immediately will do more to revitalize downtown Glendale than the unanswered recommendations of another dozen Task Force groups.

It’s time for the city council to let go of these properties. There are genuine benefits to be achieved with their sale. In the meantime, as long as the council digs in its feet and refuses to sell anything, I have a bridge in Brooklyn to sell…interested?

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

It has been 17 years and 235 days since the city’s pledge to build the West Branch Library.

On Tuesday, August 25, 2015 the Glendale city council will go into executive session. One of its topics is sure to be council’s setting of goals for and approval of a Request for Proposal (RFP) for future management of Glendale’s arena. It is a good move.

An RFP will provide information on what is the fair market value for management of its arena. The previous RFP yielded results that indicated that a fair management fee was in the $6 million dollars per year range. Those results can lead to a totally independent firm managing the arena and removing that responsibility from the Coyotes. It sets up a scenario that has the Coyotes as tenants only.

One area that will have to be resolved is that of the parking fees. Apparently under the temporary 2 year agreement the Coyotes continue to keep parking and ticket surcharge revenues. Why? These schemes…for that’s what they were…were created specifically to generate revenue for the city. They were designed to reimburse the city for the $15M a year it was paying as a management fee.

The  amount generated was approximately $8-$9M a year, not enough to cover the $15M annual management fee. Ticket surcharge revenues had always gone to the city even before the latest agreement with IceArizona. In all previous agreements there had been an escalator clause that incrementally raised the surcharge annually.

Whether the arena manager is a new entity or the Coyotes, it’s time to deal with these surcharges to the benefit of the city. Either parking is once again free as it had been before IceArizona or the parking revenue, if utilized, should go to the city. The same can be said of the ticket surcharge…either it goes away entirely or the revenue goes to the city. If the surcharges were to go to the city and the city continues to pay a $6M annual management fee it is possible that the city may actually cover that annual cost and perhaps generate some revenue to be used for the benefit of Glendale’s citizens. Now, that’s a nice thought, isn’t it? Glendale’s taxpayers have been subsidizing the arena for quite some time. It would be wonderful if the arena actually made some money. It’s time for the city to play hard ball and to stop giving away the farm.

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

When the announcement first hit the pavement regarding the resignation of former City Manager Brenda Fischer of Glendale, her prepared statement included the phrase, “she has accomplished all of her goals at the city.”

After an extensive online search no publicly stated goals could be found. Her biography on Glendale’s website (her bio is no longer available and has been replaced with Interim City Manager Dick Bowers’ bio) offered the following: “during her tenure Fisher implemented a five-year budget forecast and presented short-term budget solutions or reductions in service to the community; she reorganized the city’s structure and operations leading to a streamlined organization that has increased productivity, efficiency without layoffs and created future cost savings.” In a February 12, 2015 story written by Eric Toll of the Phoenix Business Journal Fischer is quoted as saying, “We have a totally different management staff, a young council, and a community beginning to trust the city’s performance.” She pointed out that Moody’s and Standard & Poor’s had rated the city’s finances as stable. She said the city organization was healthier and doing good things.

Before checking Ms. Fischer’s “Pinocchio rating” (every time he told a lie, his nose grew), some Glendale sports debt in a historical context is in order.

Glendale’s hockey arena known as the Gila River Arena opened in December, 2003. A little known fact is that until Jerry Moyes declared the Phoenix Coyotes bankrupt in 2009 Glendale had collected enough money every year to pay for the arena except for the period of the NHL lockout in 2005-06. From December, 2003 through June, 2010, when the NHL took over management of the arena, the city had received $22,803,757.54. The city never paid a management fee through 2009. Everything changed with the Moyes’ bankruptcy and begins the era of the city’s having to pay a management fee. To keep the Coyotes in Glendale and the arena open, Glendale paid the NHL $25 million dollars as a management fee in 2010 and 2011 while a new Coyotes owner was secured. Those funds came primarily from two sources, the city’s contingency fund and enterprise funds. The city’s contingency fund was depleted dramatically and reached a low of approximately $11 million dollars. Instead of receiving revenue from the arena as in years past, now the city was paying a management fee: $25 million a year to the NHL and $15 million a year to IceArizona. The original debt for the arena was $180 million dollars but over the years additional debt such as for infrastructure has made that figure greater. The current annual debt payment for the arena is approximately $13 million dollars a year meaning that each and every year the city must outlay $28 million dollars (debt plus management fee) just to keep the doors of the arena open.

Camelback Ranch, the city owned spring training facility cost $152 million to build. It opened in February, 2009. The original deal called for the Arizona Sports and Tourism Authority (AZSTA) to replay the city for 66.7% of the cost not to exceed $90 million dollars. Many issues unrelated to Glendale have put into question whether the city will ever be repaid by AZSTA and when. In 2014, the original loan that Glendale took out as a reserve to pay the baseball construction debt is used up and in 2018 the city will be making debt payments of $15.2 million annually. When Glendale pays off its sports construction debt for hockey and baseball it will have paid out about $849 million dollars.

Brenda Fischer came on board in July of 2013, the same month that the city council approved the annual management agreement with IceArizona for $15 million dollars. Under her watch two short-term solutions she implemented were: making the temporary sales tax increase permanent and refinancing the city’s bond debt. Fischer’s solutions in partially dealing with Glendale’s tremendous debt were not new or innovative.

The temporary sales tax increase was set to expire in 2017 because council believed that with the implementation of further cost saving solutions over the original five year period it could be sunset at that time.  Fischer’s solution was to make the tax increase permanent. It was making the temporary sales tax permanent that caused Moody’s and Standard and Poor’s to rate Glendale’s finances as stable and to remove its negative rating. Moody’s said the improved rating was tied to a Glendale City Council decision in June of 2014 to make a 0.7% sales tax increase permanent. Keep in mind that while the city’s bonds related to its General Fund debt had been downgraded, Moody’s continued to reaffirm an A1 rating for Glendale’s water and sewer revenue bonds.

Refinancing the city’s bond debt was not a new, innovative solution either. Not just Glendale but many cities make it a habit and practice to refinance their debt when market conditions are favorable. Prior to Fischer’s coming on board Glendale had refinanced its debt in February, 2012. Every time the city refinances debt, it saves money in terms of future debt payments because the interest rate is usually lowered. Anyone who had been City Manager during the past 17 months would have implemented the very same solutions. These are steps that would have been taken with or without Brenda Fischer. What about the city’s Finance Director, Tom Duensing? He deserves the lion’s share of the credit (or blame) for making the sales tax permanent and using the historical tool of refinancing the debt.

Another accolade that Fischer claims is the use of the five-year budget forecast. The city council in previous years before Fischer’s appearance had rejected the notion of a five-year budget forecast as being highly unreliable. City staff had acknowledged that the only relatively certain information to be obtained would be for the following one year — not another four years out. We know how well long range financial forecasting works — not one financial “expert”, national, regional or local, had the Great Recession on the radar screen.

Fischer also claims to have reestablished trust in Glendale government. Her bio stated, “she reorganized the city’s structure and operations leading to a streamlined organization that has increased productivity, efficiency and created future cost savings.”  Yet employee trust was further eroded when she named Julie Frisoni as an Assistant City Manager or when she allowed certain employees to leave and to be rehired at a higher pay.  Citizen trust was seriously eroded recently with the proposal to sell the Foothills Library and to relocate its remnants to the Foothills Recreation Center. City council lost trust in her when she requested the emails of three councilmembers (her bosses) that she apparently believed were against her.

Fischer claimed a lot but anyone would as a face saving tactic. Don’t forget, she’s still got Frisoni who nominated her for the Phoenix Business Journal’s Businesswoman of the Year Award and who is busy issuing glowing statements about Fischer’s accomplishments to the media. They ignore Frisoni’s press releases at their peril for they could be frozen out of obtaining any information from Glendale on any issue.

Fischer is receiving $152,000 or 9 months pay as the council’s parting gift. Many people are upset about the largesse she is receiving. Holding my nose, I support council’s decision. If they would not fire her then their only option was her resignation and it was going to cost them to obtain it. Don’t forget…there were 3 councilmembers in her corner: Sherwood, Chavira and Aldama.

What is Fischer’s “Pinocchio rating?” I will leave that for your decision. It will be interesting tothG5SHRA7E see, on a scale of 1 to 5, with 5 being the most falsehood or exaggeration, what you think.

© Joyce Clark, 2015

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This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

About a month ago I was contacted by Robin Respaut, a reporter for Reuter’s News Agency. We sat down and had a face-to-face interview as a result. I also had several phone conversations with her. I asked to be alerted when her article was published. It was published on October 30, 2014. Here is the link and the full text of the article.

http://www.reuters.com/article/2014/10/30/us-usa-superbowl-glendale-insight-idUSKBN0IJ1GL20141030

 Bad bets take a big toll on the Super Bowl’s host city

By Robin Respaut

GLENDALE Ariz. Thu Oct 30, 2014 11:49am EDT  Reuters Edition

 (Reuters) – Welcome to the sports-crazy home of February’s Super Bowl.

Over the last decade or so, this city of 230,000 on Phoenix’s northwest border, has reinvented itself from farm town to sports Mecca. It has built the dome stadium where the National Football League’s Arizona Cardinals play, the National Hockey League’s Arizona Coyotes arena, and the new baseball facility where the Los Angeles Dodgers and the Chicago White Sox appear every spring for their pre-season training.

But Glendale’s love of sports has come at a cost: red ink and jobs lost. All told, said Glendale Mayor Jerry Weiers, the town’s sports fetish has produced “a house of cards.”

And even the Super Bowl, the NFL’s annual championship extravaganza, will add to the pain. The game, and the partying that comes with it, will rake in hundreds of millions of dollars for Arizona. For Glendale? Another bill. This time because of the security costs.

A visitor to Glendale doesn’t have to look far to find evidence of its shattered dreams. At the edges of the sports district are vacant lots where there were supposed to be stores and other commercial developments that would generate taxes to pay off the debt taken on to build the sports facilities.

Glendale now spends over $40 million annually on sports-related expenses, including $15 million to manage the hockey arena, and about $25.5 million on debt service. The city’s general fund, the pool of tax money used to support city services like police and fire, has suffered big deficits.

It’s scorecard: Standard & Poor’s Ratings Services downgraded the city’s bonds three times since 2012. The Tax Foundation ranks the city’s sales tax, at 9 percent, as seventh highest in the nation, and Moody’s Investor Service says the direct debt burden is the largest among rated cities in Arizona.

Of course, Glendale’s problems aren’t uncommon. In 2010, professional sports facilities cost taxpayers roughly $10 billion more than what was typically reported – thanks, in part, to subsidies related to land and infrastructure, said Harvard professor Judith Grant Long.

But “Glendale is a particularly sad story,” said Holy Cross Professor Victor Matheson.

FOOL’S GOLD

In the 1950s, Glendale was citrus groves and cotton fields. Then came the housing boom. From 1990 to 2001, population soared 48 percent to nearly 215,000. The city had to beef up public services, but there wasn’t enough revenue-generating commercial development. “We had a mall and not much else,” said Elaine Scruggs, Glendale’s recently retired mayor of 20 years.

So when the Coyotes, in 2001, wanted to move from Phoenix proper and suggested Glendale, Scruggs pounced. The proposal included 1.6 million square feet of flashy new retail, dubbed Westgate City Center. To build the arena, the city agreed to float a $180 million bond with hopes the development would generate taxes to pay off the debt.

Before the ink was dry on that deal, Glendale was presented with another opportunity. In 2002, the Arizona Cardinals owner, Bill Bidwill, was also looking for a new home. The team targeted a site across the street from the future hockey arena. A stadium would lure more visitors to Westgate, which would mean more tax revenue — and, possibly, more development.

Mayor Scruggs couldn’t believe Glendale’s good fortune: “It was like a little kid who caught the fly ball,” she said.

By 2006, Glendale was hot stuff. The Cardinals stadium had just opened, and big name acts like the Rolling Stones were headlining.

And it was about to get better. The next year, Glendale announced its third venture: the Chicago White Sox and the Los Angeles Dodgers were looking for a new pre-season training facility.

This time, Glendale joined with Phoenix to construct a 10,000-seat ballpark and 14 practice fields. A 10-minute drive from Westgate, the facility was located just over the Glendale border in Phoenix. But Glendale agreed to issue a $200 million bond if Phoenix pledged 80 percent of the tax revenue. The anticipated economic impact to the region amounted to $19 million per year. And a new retail complex, of course, would generate revenue to pay off the debt.

Glendale’s finances were in good shape. The general fund had completed 2006 with $72.5 million in its coffers. And the city’s operating budget was $46 million in the black. So the town fathers agreed to pave a road through the desert and waited for new business to arrive.

WELCOME TO THE NIGHTMARE

After the real estate crash, Glendale’s property values dropped by half. Property tax collections slumped by 40 percent in two years. And unemployment in the city eventually spiked to 10.2 percent in 2009 from 3.1 percent in 2007.

That wasn’t all.

The Coyotes hockey team filed for Chapter 11 bankruptcy in 2009, triggering an NHL takeover. A year later, the land surrounding the new ballpark was foreclosed on without ever breaking ground. The Westgate developer also lost the property to foreclosure. Only a fraction of the proposed development had been built.

By 2012, the city was looking at $105 million in debt payments and not enough revenue to cover it: expenses of $289 million exceeded revenues by $59 million. “The city,” recalled city councillor Ian Hugh, “was sinking in its own debt.”

COYOTE UGLY

Town officials were also worried about losing the hockey team. After the NHL took over, the league asked the city to pay $25 million to manage the arena as it searched for an owner. Why cave in like that? Simple economics. If the Coyotes left, the city would be stuck with a largely empty arena. “This was the beginning of the city’s demise,” said former city councilor Joyce Clark.

In 2011, the city pulled $25 million fee from Glendale’s sanitation and landfill funds. When no owner was found by the second year, the NHL asked for another $25 million, which came from water, vehicles, technology replacement, and the general fund. “By the third year,” said Clark. “We were bleeding.” The general fund plummeted from a $66.4 million surplus in 2006 to a $26.7 million deficit in 2012.

To make up the difference, the city raised its sales tax by a third, cut 22 percent of its workforce, and, in a terrible irony, eliminated some youth sports like t-ball and flag football. Emergency Medical Service calls increased by 23 percent over a five-year period, but there were fewer workers to respond. And Glendale’s firefighters claimed 911 response times increased by two minutes.

Meanwhile, the NHL found a new owner, IceArizona, that would keep the team in Glendale. But there was a catch. The city had to pay $15 million a year in arena management fees, a cost equal to its entire parks, recreation, library and human services budget.

Glendale signed the deal, but the arena had already turned into a financial sinkhole. After dropping $50 million on NHL fees, Glendale still had an average $12.8 million in annual debt service related to building the arena. In return, the city earned back just $5.9 million during the first year in arena-tied revenues.

A WAY FORWARD?

Today, the city is preparing for the big game. The Super Bowl could bring in $500 million for Arizona, but Glendale budgeted a $2.1 million expense for security. State lawmakers have refused to help, some citing “an awesome display of fiscal mismanagement.”

Still, city officials say there’s hope. A new management team and the now-permanent sales tax increase has made Moody’s more optimistic. In September, the rating agency switched Glendale’s outlook to stable from negative.

The city is also trying to wean itself off sports. For example: A huge American Furniture Warehouse could generate $2.9 million for Glendale in its first year. In August, the city also blessed a $400 million casino resort.

Glendale won’t be on the hook for the casino’s costs and expects to receive an estimated $26 million over 20 years. Still, critics worry that the deal is another misstep. “Money going into the casino,” said Mayor Weiers, “isn’t going to the businesses that hung on by their fingernails to stay open.”

(Reporting by Robin Respaut; Editing by Hank Gilman)

During my last four years on city council, from the time the Tohono O’odham publicly announced their intent to build a casino within Glendale, I would take notes from presentations and comments of staff regarding the casino’s impact on Glendale. While they retain the essence of the statements made, I did not have the time or opportunity to write the comments verbatim. The other day I was cleaning out some old folder files and I ran across the file where I had been keeping these notes. The following was represented to me and the rest of city council by staff from 2009 to 2012.

This was said with regard to the Nation’s gaming application—  However, the issue of “first impression” within Arizona is a major one. It means that this action if granted would be precedent setting in that it would establish an Indian reservation where one did not previously exist. It may be the first attempt to do so in the nation. It is the first step to create a free for all system that establishes “off-reservation” gaming, not just in Arizona but in the nation.

Glendale staff in meeting with the Tohono O’odham attempted to ascertain more specific information. The Nation would not offer anything beyond conceptuals. Staff, after meeting with the Nation, offered the scope of the project as it was presented to them:

  • 134 acres of land
  • 1.2 million square foot complex
  • Cost of construction approx. $550 million
  • 6,000 construction jobs
  • 3,000 permanent jobs

Gaming portion:

  • 150,000 square feet
  • 1,089 machines
  • 50 tables
  • 25 poker tables
  • 1,000 seat bingo hall 

Spa/Hotel portion:

  • 480 rooms
  • 120 suites
  • 180,000 square foot convention center
  • 40,000 square foot event center

Amenities/Services:

  • 30,000 square feet of retail
  • 5 restaurants
  • 1 food court
  • 2 buffets
  • 1 coffee shop 
  • 2 bars
  • 1 nightclub

Issues identified by staff during the years of 2009 to 2012 included:

  • City’s General Plan has area designated as Corporate Commerce Center with less density and impact.
  • Sales tax revenue anticipated to be lost is $2 million a year or $40 million over 20 years as city cannot collect sales tax from federal land and that removes the land from producing sales tax for the city with other non-Indian uses.
  • There are revenues that flow to the state from gaming. However 88% percent goes directly to the state. The other 12% is distributed to all cities and counties with no larger share or preference to the host city or county.
  • The project will generate jobs but nearly all will be minimum wage employment.
  • Gaming revenues siphon off discretionary income that could have been spent elsewhere in the City
  • Staff projects water demand to be 600,000 gallons per day gpd (gallons per day). Projected wastewater demand to be 400,000 gpd. If they use the on-site well that is available to them it would impact our groundwater table. 
  • Estimated Impact fees loss is $299,500.
  • Police estimate an additional 8,500 calls for service necessitating an additional 11 officers at a cost of $950,903. There is also the problem of suspects committing crime in adjacent areas and fleeing to reservation where Glendale Police have no jurisdiction. Anticipated calls for service expected to be high due to the casino being open 24 hours a day, 7 days a week. 
  • Fire anticipates the need for an additional fire station costing:
  • 18 additional fire fighters
  • $2.8 annually for Operating & Maintenance costs
  • $14.6 million for land acquisition and construction
  • In addition, there is no mutual aid agreement for off-site service (reservation). Can be negotiated perhaps but no guarantee of total cost recovery.
  • Transportation estimates 20,000 one-way trips per day on weekdays and 30,000 one-way trips per day on weekends. It will generate 8.34 million additional trips in the area per year. There could be traffic conflicts on stadium and arena event days.
  • There is a possible impact on the Northern Parkway Project. 225 feet of right-of-way is needed on the south side of Northern between the Loop 101 and 91st Avenue. Tribe may or may not participate.

 

There are several reasons why I decided to use my old, newly discovered notes. Despite the city council’s inappropriate action this issue is not yet decided. There is still Tribal litigation to be decided and there is still Congressional legislation pending. I would anticipate Referendum petitions on the 2 council actions taken on August 12, 2014. If successful, the voters will decide Glendale’s final position.

Another reason for using them is to ask the question, was this information given to the current council? With senior administrative staff knowing that a majority of council now supports the proposed casino, they may have thought it unwise to fully inform the council. That is no excuse. Council should have had this information. If council did have this kind of information and a majority chose to ignore it and its implications of cost to Glendale, then they are not serving the best interests of Glendale.

Lastly, it is information that should be public. The citizens of Glendale have the right to know that there are costs to Glendale that have not been addressed in the recently approved agreement. I would expect the current senior administration to disavow the facts presented above, especially with regard to water and public safety. They have been given their marching orders to embrace the casino project. The question remains, why weren’t these issues and the costs associated with them addressed in the approved agreement? So much for transparency.

© Joyce Clark, 2014

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This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

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