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Joyce Clark Unfiltered

For "the rest of the story"

Dec 13

19

Merry Christmas to all…

Posted by Joyce Clark on December 19, 2013
Posted in City Council Actions • City issue and actions • City of Glendale • Glendale elected officials • Glendale finances • Jobing.com arena  | Tagged With: , , , , , , , | 22 Comments

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This will be my last posting until after Christmas Day. With less than a week before Christmas family and friends, last minute shopping and baking consume my time. Here goes. This council is often disappointing because of their lack of substantive engagement. Their December 17, 2013 council workshop had a myriad of issues, some of them quite important.

When it came to the presentation on the Monthly Arena Reports we learned some new or corroborating information. The figures that are used by the city are figures provided by IceArizona.  Mr. Duensing, Executive Director of Financial Services, stated that the expected annual arena revenue for this fiscal year will be $6,791,540 and the expected deficiency will be $7.1M. He indicated that as of November 30, 2013 (covers period from Aug. 5 to Nov. 30, 2013) the amount of revenue accruing to the city is $1,168,880. This means the enhanced IceArizona revenues to cover the $9M unbudgeted will be short by approximately $2M by June 30, 2014 (end of current Fiscal Year). I find it amazing that his forecasted estimate of annual revenue is so precise, down to the penny. Nevertheless, it portends that the city will be short a boat load of arena revenue this year.

The city budgeted $6 million dollars for arena management of the $15 million dollar total fee and expected IceArizona’s enhanced revenues to cover the $9 million dollars unbudgeted. Looks like that ain’t gonna happen.  Mr. Duensing also answered a question posed in one of my latest blogs regarding the Supplemental Ticket surcharge of $1.50 per qualified ticket. He said we won’t see this total until the end of this fiscal year per the agreement. Fine but why isn’t a monthly amount being offered to the city in the monthly reports? After all, it’s their specific line item. I’ve been told that an escrow account has been established. It would be nice if the city received confirmation that X amount of dollars is being deposited monthly into that account. After all, it is an interest bearing account and the entire amount, including interest, could very well end up going to the city.

It also raises the question of the definition of what is a qualified ticket. Here is the agreement’s definition: “Qualified Ticket” means a Ticket to a Fee Activity for which (i) the Team Owner, with respect to Hockey Events; (ii) The Arena Manager or sponsor or promoter, with respect to Team Revenue Events, City Revenue Events and other Fee Activities that are not Events; or (iii) the City, with respect to City Sponsored Events, receives valuable consideration (whether in money, services, foods or other value). Any Ticket for which (i) the Team Owner, with respect to Hockey Events; (ii) the Arena Manager or the sponsor or promoter with respect to Team Revenue Events, City Revenue Events and other Fee Activities that are not Events; or (iii) the City with respect to city Sponsored Events, (a) receives no value, or (b) receives money (but not any other services, goods or other value) for such Ticket in an amount less than 25% of the retail priced stated on the face of such Ticket, shall not be a “Qualified Ticket”; provided, however, that, if the aggregate number of Tickets described in the immediately preceding clauses (a) and (b) that are distributed by the Team Owner for a given Hockey Event (other than a Hockey-Related Event) exceeds 1,750 then the Tickets described in the immediately preceding clauses (a) and (b) distributed by the Team Owner for such Hockey Event that exceed 1,750 shall be deemed “Qualified Tickets” for such Hockey Event, unless the City and the Team Owner mutually agree otherwise.”

I suspect the city has one interpretation of this paragraph in mind and IceArizona has another. I’ve learned that arena employee tickets purchased at a discount were counted as qualified tickets in previous years. Apparently now they are not by IceArizona.  Is it because the discount is greater than 25%? What other categories of purchased tickets are no longer considered as qualified by IceArizona? Is IceArizona discounting a large number of tickets? If so, as a result, how much surcharge money is the city not receiving?

Apparently there is some sort of agreement that the number of complimentary tickets to be given away would average no more than 1,000 per game. It appears that IceArizona has far surpassed that average and in one case gave out 3,500 complimentary tickets for one game. The rationale for capping the number of complimentary tickets per game is that it frees up a greater number of qualified tickets to earn the city surcharge. I am hopeful that a Fiscal Year- end audit commissioned by the city will clear up many of these questions.

What was council’s reaction to the dismaying news that arena revenues will experience an approximate $7M deficit? Not a word. Not one single question asking how the projected deficit would be covered. Instead there was a chorus of “thank yous” to staff for bringing this information forward and making it publicly available.

The other substantive issue on council agenda was the Five Year Forecast. As presented by Mr. Duensing the bottom line is that the city faces everything from a minimal deficit of approximately $250,000 next Fiscal Year up to a substantial deficit of $30 million dollars within 5 years. He asked council to approve staff’s development of a short term plan and a long term plan to deal with these expected deficits.  He received council approval to do so along with a chorus of confidence from councilmembers that the deficit can be overcome. Mayor Weiers said it best by asking everything be placed on the table and he hopes council has the courage to make some very difficult decisions. Every citizen of Glendale hopes council has that courage. What better Christmas present could there be?

© Joyce Clark, 2013

FAIR USE NOTICE
This site contains copyrighted material the use of which has. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those 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, democracy, 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 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.

Dec 13

16

Council workshop agenda bears no Christmas presents

Posted by Joyce Clark on December 16, 2013
Posted in City issue and actions • City of Glendale • Glendale and the NFL Super Bowl • Glendale elected officials • Glendale finances • Jobing.com arena  | Tagged With: , , , , , , | No Comments yet, please leave one

The Glendale City Council workshop scheduled for Tuesday, December 17, 2013 will finally force this council to declare its financial intentions for the future. It is a jam packed agenda but there are several items that are especially important to each and every citizen in Glendale. One is a presentation of Monthly Arena Reports and the other is the Five Year Financial Forecast.

The Monthly Arena Reports were a request of Councilmember Alvarez. We know her motive and that is to show how much the city is bleeding from the current management agreement. Staff will prepare and post online each monthly arena report. The December 31, 2013 report is to be public by January 31, 2014.

Unfortunately based upon the material offered at workshop the city does appear to be bleeding as a result, in part, of the latest arena management agreement. Here is what each of the monthly arena reports will include:

Revenues to the city

  • Sales tax collected inside the arena
  • Base rent ($500,000 annually)
  • Ticket surcharge for hockey events ($3 per ticket)
  • Ticket surcharge for non-hockey events ($5 per ticket)
  • Supplemental surcharge ($1 per ticket)
  • Parking revenue for hockey events ($10 per car)
  • Parking revenue for non-hockey events ($15 per car)
  • Naming rights (20% to city)
  • Naming rights for indoor stage (100% to city)
  • City sponsored events (revenues minus expenses)
  • Safety & Security Fee ($174,122 a year)
  • Hourly security costs for police
  • Hourly security costs for fire
  • Interest income placed in an escrow account

Expenses to be paid by the city

  • Arena capital improvements ($500,000 annually for now)
  • Quarterly management fee ($3,750,000 per quarter; $15M annually)

What does all of this mean? The sales tax collection, ticket surcharges and public safety revenues are not new revenues.  The only new revenues, courtesy of IceArizona, are the rent of half a million a year, naming rights and parking revenue. IceArizona has paid $219,702 to date of its annual rent. There is no new contract on naming rights as the current contract has not yet expired. As for parking revenue we will not see the first revenue number until January 31, 2014. It will be an interesting number for IceArizona keeps the first $20,000 (that’s 2,000 cars at $10 each) per game in parking revenue. Tom Duensing, Executive Director of Financial Services, in a recent article forecast(http://www.azcentral.com/community/glendale/articles/20131213glendale-fiscal-forecast-grim.html) that the Coyotes deal will cost the city an estimated $8.1 million next year, after the city receives its revenue associated with the deal. That’s one Christmas present denied.

The second major agenda item, the Five Year Forecast, is even worse. What it boils down to is that Glendale is spending more than it takes in. The annual amount that the city is short in revenue averages $14M a year until 2017 when the temporary sales tax increase disappears. Then the average deficit balloons to $30M a year. Do you smell the temporary sales tax increase becoming permanent? If it occurs it is a major promise broken and will have consequences the next time the city asks Glendale voters to approve anything.

While operating expenses continue not to be controlled as effectively as they could be there are other obligations that put in the city in trouble. The city’s debt service (of about $30M a year) is 17% of its operating budget. It is way too high and according to Moody’s it should be in the 10% to 12% range. Add the city’s contractual obligations (of about $25M a year) at 13% of its operating budget. Fully 30% of the city’s operating budget is used to pay debt service and contractual obligations. Add to that figure, personnel costs of over 50%. There isn’t enough money to cover all of this. No Christmas present here either.

Also of note is the projected expense for the Super Bowl of $1.7 million dollars with expected revenue of $200,000. It appears that this expense is greatly underestimated. In 2008 the city’s expenses were over $2 million dollars with a loss of about $1 million dollars. In 7 years every expense has gone up, not down and the expectation was, until now, that it could easily cost the city $4 million to host. The city has only factored in the $1.7 million it must pay to the Host Committee. It has not accounted for any additional costs including staff time.

Staff will be asking council to provide direction for the upcoming FY 14-15 council budget workshops. Their choices are: fix the deficit for the coming fiscal year or fix the deficit long term. If they wish to send a strong, positive signal they will embrace a long term fix. If they are still in hopeful mode they will choose to solve the ongoing problem short term and like chicken little, put it off as long as possible. Which way will they go?

© Joyce Clark, 2013

FAIR USE NOTICE
This site contains copyrighted material the use of which has. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those 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, democracy, 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 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.

Oct 13

2

NFL is a “Super Bully,” Part 3

Posted by Joyce Clark on October 2, 2013
Posted in Glendale and the NFL Super Bowl  | Tagged With: , , , , , , , | 1 Comment

Disclaimer: I voted in favor of Glendale’s hosting of the 2008 Super Bowl. I wanted to see if its results benefited Glendale financially. It did not. As a result, I voted against Glendale’s hosting of the 2015 Super Bowl. Please take a moment to participate in my informal Super Bowl poll to the left of this article.

The NFL is a non-profit and also a monopoly. It has tremendous wealth and power. It encourages potential host cities to upgrade or construct football facilities with the promise of a Super Bowl. It validates the economic benefits of a Super Bowl by funding economic studies and then uses their results liberally.

How did Glendale end up in this mess? Go back to the time when the Bidwills were looking for a permanent home for the Cardinals’ stadium. Remember? None of the East Valley cities, even Mesa, wanted it. The East Valley was where they yearned to locate but it was not to be. So it came as no surprise that John F. Long’s offer of free land in West Phoenix adjacent to the 101 was rejected. Glendale was the bridesmaid who became a bride by default. After all possible options had been explored Glendale was chosen. It was positively embarrassing.

The state created the Arizona Sports and Tourism Authority (AZSTA) as a mechanism to fund construction of the stadium and the Bidwills took out a loan (at an extremely favorable interest rate) from the NFL’s G-3 Stadium Program. Glendale issued $35 million dollars worth of bonds to pay for enhancing the infrastructure around the stadium. Make no mistake it may be a County facility outwardly under the control of AZSTA but it is the Bidwills who silently manage and operate the facility.

As the specifics of the event unfold it was learned that Scottsdale would continue to have a mutual relationship with the NFL for many years to come regarding hotel rooms and in fact, the teams would stay at Scottsdale hotels. Nearly all of the associated events and parties – even the media center — would be in Phoenix, Scottsdale, Paradise Valley, Tempe — any place but Glendale. We aren’t tony enough. Is it any wonder when you hear when Jacksonville hosted the Super Bowl each of the 32 team owners was given personalized use of a yacht?

It remains advantageous to every entity but Glendale to this day. Just look at the Scottsdale Council Economic Development report of April 30, 2013. Here’s the link: http://www.scottsdaleaz.gov/Asset48262.aspx . Check out the proposed agreement summary below between the Arizona Host Committee and Scottsdale.  Is it any wonder Glendale may not be thrilled with the prospect of hosting at a loss when it continues to receive the back of the NFL’s and Arizona Host Committee’s hand?

“Proposed Agreement Summary

The following are benefits outlined in the proposed agreement between the City and the Arizona Super Bowl Host Committee.

• Host Committee will include 3,194 hotel and resort rooms within Scottsdale in its official Super Bowl XLIX room block.

• Host Committee, working with the SCVB (Scottsdale Convention and Visitors Bureau), will encourage Host Committee sponsors and prominent groups to use Scottsdale hotels and resorts for Super Bowl XLIX.

• Host Committee, working with the Sponsor and SCVB, will encourage the use of Scottsdale venues and businesses as sites for Host Committee events and activities related to Super Bowl XLIX. The Host Committee will encourage the use of Scottsdale bars and restaurants as sites for third parties for private events.

• Host Committee will include Sponsor and SCVB representatives, to the extent qualified, on committees dealing with regional public safety and transportation issues associated with the Super Bowl. Sponsor and SCVB will also be represented on committees, if any, dealing with Host Committee events in Scottsdale.

• Host committee will work with SCVB to highlight key Scottsdale resorts, venues, restaurants, etc. during the Host Committee FAM trip proposed for 2014.

• Host Committee will use commercially reasonable efforts to include applicable Scottsdale businesses in Host Committee’s Business Connect Program, benefiting local minority and women-owned businesses.

• Sponsor will have representation in the Host Committee Business Development program, focused on attracting new companies to or expansion of existing companies in Arizona and Scottsdale, and increasing Scottsdale’s convention and meeting business.

• In accordance with the Agreement and Sponsor Guidelines, Sponsor or SCVB logo or text will be included in Arizona Host Committee promotional materials including website and brochures.

• In accordance with the Agreement and Sponsor Guidelines, Host Committee will include Scottsdale events in its social media and provide support for Sponsor events, which might include guest speakers, mascot appearances, etc.

• Host Committee will provide Sponsor directly, or if requested by Sponsor, provide SCVB for the benefit of Sponsor, with corporate entertainment and hospitality opportunities related to Super Bowl XLIX consisting of:

• 12 Super Bowl XLIX Game Tickets

• 12 Host Committee Pre/Post Game Hospitality Tickets

• 30 NFL Experience Tickets

• 12 Tickets, in the aggregate, to Host Committee events or other VIP experiences as mutually agreed upon between the Host Committee and Sponsor

• Host Committee will designate a Host Committee liaison that is available to the Sponsor for questions, concerns, resolutions.

• Host Committee, at the Sponsor’s request, will provide an annual meeting and/or written communications that provide updates on all that is occurring in the way of progress, planning of the event, as well as sponsorship deliverables beginning December 2013.

• Host Committee shall provide the Sponsor a Post Event Report, which will enable an evaluation of the Host Committee’s performance under this Agreement Report shall include a valuation of the Sponsorship Benefits. The report shall be provided to Sponsor no later than 60 days following the conclusion of Super Bowl XLIX.

• In addition to the Post Event Report, if requested. Host Committee will work with Sponsor to prepare recap for the Sponsor Council within 60 days following Super Bowl XLIX.

• Host Committee will make available to SCVB additional promotional opportunities related to Super Bowl XLIX.”

ESPN has announced it will use Scottsdale as its base for weeklong Super Bowl coverage and will offer the city tons of free publicity as it highlights Scottsdale’s desert scenes. For another “diss” to Glendale check out this website: http://www.visitphoenix.com/media/details/index.aspx?nid=412 that blatantly announces that the NFL has chosen Phoenix as its 2015 host city. Geez…and all along we thought Glendale was the host city. How silly of us. Every Glendale resident should be outraged.

How does the Arizona Host Committee fit into this scenario? It is the interface with the NFL. It prepares and presents a bid for consideration to the team owners.  It is charged with raising millions of dollars to offset the costs (and perks offered to team owners and NFL upper management) of the Super Bowl. It is the visible voice of the Super Bowl until the NFL arrives in town. It must gather thousands of volunteers to work the event. Each of the participating cities must tithe to the Host Committee based on population (ironically, Glendale’s population is greater than that of Scottsdale’s). Prior to the first Super Bowl in Glendale the Host Committee virtually ignored Glendale. It had meetings of which Glendale was not informed and to which Glendale was not invited to participate. From then until now it has treated Glendale as the poor relative to be tolerated.  It never welcomed Glendale as a full participant in the decisions or preparations. When Glendale’s financial loss from the first Super Bowl it hosted was known I began to call for the Host Committee and major beneficiary cities like Phoenix and Scottsdale to lobby for legislation to make the host cities financially whole. After all, it would have benefited them as well. The silence was deafening. What about the Bidwills? After all, they have a lot of influence in this state. Where was their support? Oh wait, they are holding out for a parking garage built by the city. Collectively there was none and instead we heard that perhaps we should wait a few years until the legislative atmosphere was more amenable. Well, a few years have passed and there’s still no support.

The September 29, 2013 edition of the Arizona Republic blares that the NFL will place events in other Valley cities. Oh really? No big deal. They’ve been sticking it to Glendale for years. Excuse me, what are they going to take away when there are no events slated for Glendale to begin with? No, this is really a piece of heavy handed blackmail, big time, by the NFL. They perceive that proverbial crack in the host city dike. They want Glendale’s hotel rooms. Glendale’s hoteliers have declined to participate and why should they? What’s in it for them? Do they get additional publicity because a team is staying at a Glendale hotel? No. Do they get additional publicity because NFL team owners are staying at a Glendale hotel? No. There is no incentive for Glendale hoteliers to cooperate. It earns them nothing other than a cap on what they charge for a room during the event. When will they realize that if they want Glendale’s support and that of its hoteliers rather than using the blackmail stick they might consider the incentive carrot. Our Moms used to say, “You get more flies with honey than vinegar.” It’s time for the Host Committee and the NFL to welcome Glendale into the fold as a full participant in preparation for this event.

Think about this. The NFL has set up a system whereby host cities must bid against one another and are forced to offer more and more outrageous goodies for the privilege. It’s time for the host cities to form a consortium of their own to stop this ever more expensive and crazy bidding war. They should develop their own basic ground rules and commonalities of interest. Perhaps they should develop a rotation system. It would certainly be to their advantage. What is the NFL going to do? Move to Europe? Hardly.

Did Glendale do a good job hosting its first Super Bowl? You bet it did. The city received many kudos. We were told by NFL officials, “You had the best Super Bowl ever.” Is Glendale capable of hosting the Super Bowl? Of course it is. Transportation and Public Safety personnel already have the experience of one under their belts and have been planning for the next one. Our city personnel are competent and experienced. The city is ready. Is parking an issue? No, it is not. Part of the parking requirements in the bid refer to the NFL Experience which is going to Phoenix, not Glendale. No surprise. The NFL rents vacant land to use as temporary parking lots in addition to the parking provided by Glendale. It’s a non-issue. There is one area of concern. In preparation for 2008 the council made a conscious decision to allocate funds in a special account for several years prior to the event. This time there has been no conscious decision to allocate funds for use during the event. Perhaps it will be done at the October 1, 2013 city council workshop or failing that, certainly at the council budget workshops in the spring.  The 2008 Super Bowl cost the city over $2M. Expect that cost to have doubled to at least $4M. Where will it come from? Council must address this issue and do so quickly.

Someone asked if the first Super Bowl was so bad for Glendale why is it hosting another one? The answer is not quite so simple. A majority (I was not one) of the council voted to participate in the bid process and therefore were on board to act on a winning bid. I cannot speak for the majority. Their rationale appeared to be to ignore Glendale’s fiscal loss from 2008 and to focus on the intangibles, especially the Frisoni message of intangible publicity value for Glendale. I question that assumption when the media center will be sited in Phoenix and networks like ESPN will broadcast from Scottsdale.  I assume they thought the intangibles outweighed the negative fiscal loss to the city. Or perhaps they feel that hosting the Super Bowl gets them an invitation into the “big boys club.” Our former mayor, who voted in favor of hosting the Super Bowl in 2015, often stated that the West Valley, especially Glendale, did not get the respect it deserved from other Phoenix metro cities. Councilmembers Knaack and Martinez were very tight with the former mayor and may have shared her perspective.

If I was on Glendale’s city council and another opportunity presented itself to host another Super Bowl, just as for 2015, under the current conditions, I would vote “no.” It’s a matter of principle. Glendale must be recognized by the NFL and the Arizona Host Committee as a full partner in the process. It must reap some of the rewards as a host city by becoming a site for major special events and parties. Until there is a financial mechanism in place to make Glendale whole it makes absolutely no sense for our residents to subsidize an event that seems to benefit everyone but Glendale.

©Joyce Clark, 2013

FAIR USE NOTICE
This site contains copyrighted material the use of which has. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those 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, democracy, 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 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.

 

Aug 13

24

Fix it

Posted by Joyce Clark on August 24, 2013
Posted in City Council Actions • City of Glendale • Glendale elected officials • Glendale finances  | Tagged With: , , , , , , , | 5 Comments

In the August 24, 2013 edition of the Arizona Republic there is a story entitled Glendale ratings lowered by Russ Wiles and Caitlin McGlade. They report that Moody’s Investors Service downgraded Glendale’s credit ratings from A2 to A3. Even with the downgrade, Glendale’s credit ratings remain in the superior “investment grade” category. It is an omen of Glendale’s future if this council does not act boldly.

Moody’s says, “The downgrade of the GOULT (General Obligation Unlimited Tax) rating primarily reflects unusually weak management practices denoted by ongoing internal and state-controlled investigations of certain financial actions dating back to 2009. The report also cited the “outsized” risk exposure to the Coyotes under a new arena deal that requires the city to pay an annual $15 million management fee to the team’s owners.” Moody’s concerns relate to Glendale’s large debt burden and an overburdened General Fund. It went on to say, “Additionally, the outlook reflects our expectation that Glendale will remain challenged to balance its budget over the medium term due to a high level of fixed costs.” What does it mean and what effect does it have on Glendale?

It means that Glendale’s financial debacle on instituting the Employee Retirement Program (ERP) at a cost of over $6M taken primarily from its Trust Funds, the continuing high fixed costs to the General Fund and its commitment to pay Coyotes ownership $15M a year have been recognized and are of concern to credit rating agencies. The downgrade means that when Glendale has to issue bonds the interest rates will be higher, considerably higher. A simple analogy is that when you wish to buy a house you are pre-qualified. If you have a good credit score your interest rate is low. If you have a poor credit score your interest rate is much higher. Your monthly mortgage payment incorporates that interest rate causing your payment to be within a comfortable or decidedly uncomfortable range. It affects the size of and the quality of the house you can afford to buy.

Glendale ‘s Capital Improvement Program (CIP) will not see new parks, libraries or pools for quite some time because its bond issuances are impacted by the downgraded credit rating. But there are other needs. Bonds are issued to maintain and upgrade Glendale’s basic infrastructure. Moody’s kept the A2 bond rating intact for Glendale’s water and sewer bonds primarily because those services are funded by the users of those services and are not typically impacted by its General Fund. Although Glendale receives Highway User Revenue Funds (HURF) and other shared revenue funds they typically are supplemented by bond issuances for such projects as major road construction. One example is the construction of the Northern Avenue Parkway. Although the state and other cities are sharing in the costs of construction Glendale’s costs are substantial and it issues bonds to cover those costs. There will be impacts, immediate impacts to the issuance of bonds for Glendale’s aging and new but critical infrastructure.

What does Glendale need to do to reverse the downgrading of its bonds? How does Glendale fix it?

SOLUTION ONE: One issue cited by Moody’s is being dealt with now and is the implementation of the recommendations offered in the external audit report. Their adoption will strengthen Glendale’s financial policies, restore integrity to the system and send a signal not only to the bond market but to its citizens that it is serious about reform.

SOLUTION TWO: Another issue cited by Moody’s is the $15M payment to the Coyotes ownership. I can see it now. Members of the Coyotes nation saying here she goes again…blaming the Coyotes. I fully understand the desire to protect from and deflect away any unfavorable information associated with the deal or ownership. Yet it remains the “elephant in the room” that must be acknowledged. It is a decision that Moody’s has used as one of the factors in downgrading Glendale’s bond rating. That’s a fact. There is no immediate fix. Glendale is bound by a 5 year contract and expenses of $75M in management fees over the next five years. It will have to reassess its position after a year’s worth of hockey games to see if the “enhanced revenues” did indeed produce the $9M a year so desperately needed. If the goal is accomplished it provides Glendale some much needed breathing room. If the goal is not achieved Glendale will have to compensate for the revenue loss by making even further adjustments to its General Fund.

SOLUTION THREE: The last major issue is Glendale’s overburdened General Fund — not the Enterprise Funds of Water, Sewer and Sanitation. These funds derive their revenues from rate payers, you and me, when we pay our monthly water, sewer and sanitation bills. The General Fund’s expenses continue to outstrip the revenues it receives in the form of sales tax collection and state shared revenue. Options are limited: sell city assets (a short term fix); further employee reductions; create more efficiency; make draconian cuts; or a combination of all of these options. This is a painful and touchy subject for all. 60% of General Fund expenses are attributable to public safety. Glendale is at the point where it has gangrene in its leg. Do not amputate the leg and watch Glendale die as the gangrene rapidly spreads through the body or amputate the leg; stop the gangrene and Glendale will live long into the future. This is no time for political posturing. This council, each and every one of them, must adopt the will and the internal grit to do whatever is necessary, including cuts, to guarantee Glendale a healthy future. Can they? I hope so. There is no way around it. Their only mandate is to fix it.

©Joyce Clark, 2013

FAIR USE NOTICE
This site contains copyrighted material the use of which has 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, democracy, 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. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those 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.

Aug 13

21

Weighty issues stay behind closed doors

Posted by Joyce Clark on August 21, 2013
Posted in City Council Actions • City of Glendale • Glendale elected officials  | Tagged With: , , , , , , , , | 2 Comments

The most discussed item on the Glendale council workshop agenda of August 20, 2013 was that of prayer. This is not a council that questions staff reports or recommendations. There are several reasons that could account for their lack of inquiry. They could agree with all aspects of the item presented or they might not have done their homework and actually read the material. Take your pick. Keep in mind even when a councilmember agreed with an item, questions were often posed to staff to flesh out and offer further explanation.  In other words, it provided an opportunity to educate. Several councilmembers appeared to be reading the material in their workshop books for the first time. That is not as uncommon as you might expect. On previous councils there were always one or two councilmembers who were reading the material for the first time during meetings.

Glendale City Council

Glendale City Council

This is not a council of passionate belief or extraordinary intellect. Qualities required to create an atmosphere of forthright debate rather than passive acceptance. One exception is Councilmember Alvarez whose stubbornness and lack of understanding of an issue is often mistaken for passion.

Prayer is Mayor Weiers’ initiative. Coming from the state legislature where prayer is offered provided the impetus to introduce the concept in Glendale. He appears to have the support of Councilmembers Hugh, Sherwood, Alvarez and Chavira to bring it to a vote of approval. As stated in my last blog prayer may be fleeting as the Supreme Court takes up the issue of prayer at town meetings this fall. Councilmember Martinez and Vice Mayor Knaack dissented. They preferred continuation of the moment of silence and felt that the concept may cause problems in the future. They represent the sentiment of my unscientific blog poll to date. 67% of the responders do not support initiating a prayer and 33% of the responders do support it. Perhaps the best course of action would have been to “let sleeping dogs lie.”

When it came to Council Items of Interest, nearly all of the items were a recitation of the issues currently facing them, i.e., Camelback Ranch debt, the proposed casino, future revenue projections, the fire department’s “structural deficit,” and employee compensation. There were a few new ideas to explore. Councilmember Martinez asked to look at loose trash collection with the idea of changing it to a quarterly service or eliminating it altogether. That idea is sure to generate a lot of comment from Glendale’s citizens. Councilmember Sherwood suggested a look at the sister city concept with an intent to partner with a Canadian city that hosts hockey. Mayor Weiers agreed saying that Anthony LeBlanc (new owner of the Coyotes hockey team) had suggested the idea. Councilmember Chavira offered an idea, admittedly not his own, that asked staff to look at interim uses (such as an archery range) for the Western Area Regional Park (now called Glendale Heroes Memorial Park).

We know that critical issues such as the arena management contract, the external audit and meeting the City Attorney candidates occurred during what is turning out to be, all-too-frequent, closed Executive Sessions. The weighty issues are not for your consideration…only their eventual outcomes.

©Joyce Clark, 2013

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Jul 13

25

So you want to be a councilmember…final part

Posted by Joyce Clark on July 25, 2013
Posted in City Council Actions • City of Glendale • Glendale elected officials • Glendale finances  | Tagged With: , , , , , , | 1 Comment

AWARD WINNER FRUGAL SPENDERS…#6 MARTINEZ AND #7 KNAACK

Martinez photo

Manny Martinez

Knaack

Yvonne Knaack

Councilmember Martinez spent $7,117.47 in 6 months of expenditures and Vice Mayor Knaack spent $3,672.29. Both exhibited restraint in their spending with the exception of a few items. It would be appropriate to get an explanation from Councilmember Chavira on his expenditures that in 6 months that are 7 ½ times the amount of Vice Mayor Knaack.

It should be noted that Councilmember Martinez spent $4,126.97 (53% of his 6 months of expenditures) for its intended purpose — that of infrastructure improvements within his district. He, like other councilmembers, has cell phone charges of $411.13 and land line charges of $1,328.00. Otherwise his budget is clean and all of his expenditures are reflected in his infrastructure expenditures, phone charges and the state National League of Cities convention.

Vice Mayor Knaack has no phone charges and is to be highly commended for that practice. She did donate $609.62 to the Glendale Arizona Historical Society. I wonder if she was aware of the thousands of dollars this organization received from other councilmembers. She, too, attended the state National League of Cities convention, very frugally.

money 11Both of these councilmembers have repeatedly called for all councilmembers to reign in their spending and to return portions of their budgets back to the city’s General Fund. They are the only 2 councilmembers to consistently practice what they have preached. They get it. They understand that with Glendale’s financial constraints every penny and every dollar and how it is spent becomes important. Kudos to both.

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Jul 13

24

So you want to be a councilmember…Part 4

Posted by Joyce Clark on July 24, 2013
Posted in City Council Actions • City of Glendale • Glendale elected officials • Glendale finances  | Tagged With: , , , , , | 1 Comment

MIDDLE OF THE ROADERS…#4 WEIERS AND #5 SHERWOOD

Weiers

Jerry Weiers

Sherwood

Gary Sherwood

There is no earth shaking surprise in either of these gentlemen’s budgetary expenditures. Certainly they have not adopted the philosophy or practice of giving your taxpayer dollars away as Chavira, Alvarez and Hugh have done. Mayor Weiers 6 months of expenditures comes in at $14,041.33 and Councilmember Sherwood is not far behind with expenditures of $11,516.37.

It’s common knowledge that they don’t like each other very much as each vies for the title of ultimate power broker in Glendale. They are discussed in unison because they share commonalities when it comes to spending. Both like to travel with each racking up substantial travel expenses and each spent about the same amount for the use of phones whether land line or cell.

money 3Mayor Weiers spent $4,729.15 (33% of his 6 months of expenditures) on travel for 3 trips. In March he and Councilmembers Sherwood and Chavira, staffed by Intergovernmental Director, Brent Stoddard, went to Washington, D.C. for the National League of Cities (NLC) Congressional City Conference. In April Weiers and Stoddard went to Washington, D.C. for the Greater Phoenix Economic Council (GPEC) Executive Mission. In May Weiers was back in D.C. with Stoddard. If Stoddard’s expenses to staff Weiers and others in D.C. are added those trips become pricier at $8,541.00.

money 5Sherwood spent $3,927.22 (34% of his 6 months of expenditures) on travel as well. If a quarter of Stoddard’s expenses (Stoddard staffed 3 elected officials on the March trip to D.C.) are added, Sherwood’s tab for travel cost the city $5,069.45 in direct and indirect costs. Stoddard typically pays for meals, especially dinners if the elected officials have not been invited by another party. He will pay cab fare and miscellaneous expenses on behalf of the elected officials.

Weiers’ phone bill comes in at $1,259.52 and Sherwood spent $449.10 for his cell and another $789.85 for his land line totaling $1,238.95. Their phone expenditures in 6 months are virtually the same. Is it appropriate to cover their phone expenses? That is a judgment call and something you must decide.The balance of their budgetary expenditures is ordinary and appropriate.

These trips were probably meaningful and were dedicated to lobbying for the city’s interests on issues such as the F-35 to be based at Luke and the casino issue. Everything in D.C. is pricey but we expect moderation. Their lodging and airfare are reasonable for a trip to D.C. but Stoddard’s expenditure of $1,284.52 for meals (dinners for 4) is on the high side.

In an era of frugality and tightened budgetary expenses in Glendale it is more important than ever before that our elected officials spend their travel dollars wisely. A reminder that these trips are funded with taxpayer dollars may encourage them to be more mindful.

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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

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

25

City Council workshop, meeting and special meetings…Whew!

Posted by Joyce Clark on June 25, 2013
Posted in City of Glendale  | Tagged With: , , , , , , , | 13 Comments

hidden agendaThis week, June 24-28, 2013 there are 3 city council meetings scheduled. First up is a Special workshop meeting at 1:30 PM today. It consists of Executive session (Esession) items only, meaning a secret session. We all know the topic of discussion is the Renaissance Sports and Entertainment (RSE) bid for arena management. It has been reported that the details of the bid may be released on Wednesday, June 25th. The only reason for this meeting is because RSE and the city (COG) are still negotiating the terms of the deal. There would only be two outcomes: 1. the council has accepted the terms and is comfortable with them or 2. the council still has issues with the final terms. Either way, this council has signaled that it is ready to put this issue to bed and vote on it on July 2nd. Keep in mind that just because the RSE bid has finally made it to a voting meeting does not insure a positive outcome. What it does signal is that the council is ready to vote, up or down, RSE’s bid and be done with the issue.

gambling 2The evening meeting (voting meeting) of July 25, 2013 has 3 financial items of interest. The first, Item #8 is prepayment of $5.6M of General Obligation bonds (usually paid for from the city’s secondary property tax collection) by the Water and Sewer Enterprise Fund. This is an interesting strategy and may free up General Obligation bond capacity for future bonding…on what? We can only wait and see.

man moneyThe second item, Item #26 is Authorization for Lease Financing of the City Hall Complex. In 2010, the city had to pay the NHL $25M to run the arena. This $25M has been paid to the NHL. Here’s where the money came from:

  • $21M loan from the city’s Landfill Fund
  • $4M loan from the city’s Sanitation Fund

In 2011, with the Coyotes ownership issue still not resolved, the city agreed to pay the NHL a second $25 to operate the arena. This $25M is still being held in a city escrow account. Here’s where that money came from:

  • $15M loan from the city’s Water and Sewer Fund
  • $2M from the city’s Technology Replacement Fund
  • $3M from the city’s Vehicle Replacement Fund
  • $5M to be paid with an unidentified source to NHL

This lease-back deal will replace:

  • $15M loan to the City’s Water and Sewer Fund
  • $4M to the city’s Sanitation Fund
  • $2M to the city’s Technology Replacement Fund
  • $3M to the city’s Vehicle Replacement Fund
  • $5M whose source had been unidentified and unfunded to pay the last of the NHL’s second $25M
  • $1M as a new project to upgrade the city’s Human Resources software

As you can see, that leaves 1 loan payment outstanding and that is the $21M loan from the city’s Landfill fund. That $21M is part of a reserve account to cover landfill closure. Since the landfill is not anticipated to close for 30 years, the city can afford to repay this reserve account over the next 30 years. Is this a good strategy? Yes, it is. It replenishes those Funds so that they can once again operate effectively and gives the city some breathing room to pay back those costs associated with the NHL’s operation of the arena for 2 years. It is a strategy that hopefully this council will approve.

The last item, Item #27 is an increase in rates, primarily to commercial customers for roll-off bins and disposal rates. The rental cost of a roll-off bin increases from $160 to $175 and the disposal fee per ton increases from $18 to $20. These are fees that have not been adjusted in quite some time. As usual, when there are rate increases, it becomes a double-edged sword. As the rates go up, the number of customers may decrease dependent on market competition by private sanitation companies. Nevertheless it is an increase long overdue.

budget 3The third and Special Meeting is scheduled for June 28, 2013. Do not look for a vote on the Coyotes unless this meeting agenda is changed and posted by 5 PM on Wednesday, June 26th. . The city, by law, must have its tax increasefinal adoption of Fiscal Year 2012-13 Budget Amendments and the Fiscal Year 2013-14 Property Tax Levy before July 1, 2013. These items satisfy that legal prescription and will be largely unnoticed by Glendale residents due to its final adoption on a Friday morning at 9 AM. The other two items, fire-related for strength training and medical transport, were added simply because they could be at this meeting.

There you have it. Three meetings scheduled. Only one of which is the Coyotes ownership issue and we are not privy to its goings on. The other two meetings deal with financial issues created by or related to arena management.

deadline 1The finale of the Coyotes ownership RSE bid is still scheduled for July 2, 2013. Are there 4 affirmative votes? Only the councilmembers know or think they know. If RSE still wants $15M a year as the management fee and cannot or will not guarantee a minimum of $9M in “enhanced revenue streams” to the city this council may find it a difficult deal to swallow. Are we about to experience deju vu? The very mechanics of the deal could cause the Goldwater Institute to reappear. I suspect they are watching very, very closely. Then there is Ken Jones and his ilk who absolutely hate anything Coyote related. Could they mount another referendum drive? Yes, they could and would just to stall the deal. After all, how long will Fortress Investment Group leave an open-ended loan available to RSE?

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