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Joyce Clark Unfiltered

For "the rest of the story"

Sep 13

17

With justice for all

Posted by Joyce Clark on September 17, 2013
Posted in City of Glendale • Glendale elected officials  | Tagged With: , , , , , , , , | No Comments yet, please leave one

 

The September 14, 2013 edition of the Glendale Republic reports that former Assistant City Manager Horatio Skeete and former Assistant Budget Director Don Bolton are appealing their terminations to the City’s Personnel Board (an advisory board of appointed citizens). Good for them. If there is any justice in this world they shouldn’t be left as the only fall guys (along with former Director of Finance Schurhammer and former Budget Director Goke). At the very least the City will have to back up and to prove its charges to the Personnel Board. There remains faint hope that the Attorney General’s office will bring charges against some of those who left before everything hit the fan. Based upon its track record in dismissing all recent Open Meeting Law violation complaints don’t hold your breath.

In City Manager Brenda Fischer’s termination letter to Skeete she says, “This action is based on your violation of city of Glendale policies and procedures. Specifically, the results of an external audit indicate that you were dishonest and misleading to the Glendale City Council on numerous occasions.” Whoo Hoo! If this is her reason for dismissal then there’s a long list of upper management personnel who fit the City Manager’s Bill of Particulars. As just one example, go all the way back to the “Indictment Period.” That was when the City Clerk told Councilmembers that they could backdate their signatures on their annual financial disclosure statements. If that wasn’t dishonest and misleading then there is no such thing. Councilmembers Eggleston, Goulette, Frate (each charged with 2 felonies; Goulette also received perjury charge) and Martinez (1 felony charge) apparently thought there was nothing wrong in doing so and followed her advice.  In 2004 they were indicted by the Maricopa County Grand Jury along with the City Clerk Pam Hanna (9 felony charges) and were charged with violating financial disclosure laws, tampering with and destroying public records, perjury and presenting false instruments for filing.  The charges were eventually dismissed on a technicality. They should be grateful not just for those “technicalities” but for the sharp attorneys who use them as a means of thwarting justice.

 For a period of nearly 10 years, under City Manager Beasley, misleading and dishonesty appeared to have been practiced as fine arts. It became ingrained in the organization’s culture witnessed by directives limiting what a staffer could and could not say to a councilmember. It reached its peak not just with the 2009 dollar transfers from funds but with the 2012 internecine warfare between former City Attorney Tindall and former Assistant City Manager Skeete vying for Council’s appointment as Interim City Manager. Tindall’s faction appeared to have been particularly adept. Isn’t it ironic that the very people who supported Skeete now find their heads chopped off during Acting Assistant Manager Julie Frisoni’s watch? Frisoni was clearly a supporter of Tindall and I can remember attending an event at the city’s convention center when Frisoni and Fire Chief Burdick lobbied me to support Tindall as the Interim City Manager.

It is also mystifying that City Manager Fischer has announced that the city is dropping an investigation into policy violations outside the scope of the external audit. On August 2nd she announced such an investigation. A month later…poof! It’s gone. Such an investigation might have led to other policy violations by active personnel. It might have led to wholesale dismissals which she might not have been able to afford as a new city manager. If that is what is needed, so be it. When there is an infection it must be removed entirely or it just resurfaces somewhere else. Maybe there’s an unwritten code in the fraternity of city managers that says do no harm to past or present brethren. Who knows?

While all this turmoil occurs there is an entire cadre of Glendale personnel quietly doing their jobs to provide the best service possible to Glendale’s residents. They are the people who keep our water running, our streets safe and take care of our garbage and loose trash. They don’t earn the exorbitant salaries that make the newspapers. They are a quiet army that keeps a city running. They should not be smeared with this executive mismanagement paint brush. Many of them were shocked to learn what had occurred. They are to be recognized and thanked for their fierce commitment to Glendale and its residents. So, thank you to all of the City of Glendale employees who faithfully and loyally serve us all.

©Joyce Clark, 2013

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Sep 13

11

Glendale stay the course

Posted by Joyce Clark on September 11, 2013
Posted in Casino  | Tagged With: , , , , , , , , , , | 3 Comments

On September 11, 2013 the Glendale Republic ran an article by Caitlin McGlade entitled Glendale softens harsh casino tone. It makes me angry to see the AzRepulsive begin its not so subtle media infomercial in an effort to sway public opinion in support of the Tohono O’odham (TO) Tribe’s ambitions.  In my latest unscientific blog poll I asked the question, Is the Arizona Republic’s reporting fair and balanced? Of the 50 respondents, 40 (80%) said, “No” and 10 (20%) said, “Yes.” 4 out of 5 people no longer believe that its coverage is fair and balanced and recognize that its reporting is slanted.

I stand with Congressman Trent Franks, the Gila River Indian Community and the Salt River Pima-Maricopa Indian Community (and all of the tribes in the state supporting them). I do not support a casino in Glendale and I believe a dialogue with the TO only becomes necessary if all legal avenues are closed and the Tribe prevails. It sends the wrong message.

I am not going to repeat all of the reasons why planting a casino in Glendale should not happen. Instead, in April of 2013 I authored a 5 part blog series on the effects of a casino. If you have not read them, please take the time to go back and check them out:

  •    April 11, 2013      Casino, to be or not to be, Part 1
  •    April 15, 2013      Casino…promise made, promise broken, Part 2
  •    April 16, 2013      Casino…good, bad or indifferent?, Part 3
  •    April 22, 2013       A casino is a casino…no matter where it is, Part 4
  •    April 24, 2013      Casino…it’s lose, lose for everyone, Part 5

What truly dumbfounds me is that one of the major rationales for keeping the Coyotes hockey team at Glendale’s Jobing.com Arena is that it generates more people and therefore more sales tax to the businesses (and the city) in Westgate. Yet Councilmember Sherwood apparently believes that the casino will do no harm to Westgate and says, “There’s not enough right now to keep people here. The casino just offers another thing for folks to do if they’re in town.” Is he nuts? Even Peoria Mayor Bob Barrett who has supported the casino from the start acknowledges, “In the short term, it (the casino) will probably hurt Westgate…” Sherwood is speaking from both sides of his mouth. On the one hand keeping the hockey team is good for Westgate and on the other the casino is good for Westgate as “another thing for folks to do.” We know that the casino will siphon discretionary dollars away from Westgate. Councilmember Sherwood, you can’t have it both ways.

Vice Mayor Knaack is performing her usual wringing of hands routine and practicing “kumbaya” with her comment, “We can’t keep on and on and on with this.” She just wants everyone to get along. Whatever happened to sticking to one’s principles? Is this another example like her avowal that she supports the downtown merchants as she votes approval for a liquor license they opposed?

Councilmember Martinez gets it with, “How do casinos attract their clients? Cheap booze, cheap food and the cost of the rooms are minimal. Here (at Westgate) we have hotels and restaurants paying taxes and helping us pay off our debts to the arena and everything else and the tribe comes in with a clean hand and they don’t have to pay anything.” Bravo Councilmember Martinez. You do get it and you are sticking to your principles.

The Gila River Indian Community said, “…any dialogue between the city and the TO would have no bearing on the Gila River’s position.” Salt River Pima-Maricopa Indian Community President Diane Enos said it best in this statement, “If the commitments to keep tribal casinos out of neighborhoods made by all 17 Arizona tribes during Prop. 202 negotiations were being kept, cities like Glendale wouldn’t find themselves in these circumstances, vulnerable to broaching risky developments like this off-reservation casino, exasperated further by the current economic climate in Glendale.” Bravo President Enos. You get it too. I wonder what the Republic’s position would be if the Tribes pulled their considerable advertising dollars?

Let’s at least acknowledge that the TO and its supporters are preying on Glendale’s weakened financial position and using it as leverage to further their cause. Before its indebtedness became a cause célèbre leaders in Glendale stood on principle. How much gold are our elected officials willing to sell out for? Glendale must stay the course.

PS: In the September 12, 2013 edition of the Arizona Republic the story ran again. Only this time the comments from the Salt River Pima-Maricopa Indian Community and the Gila River Indian Community are omitted while keeping the TO’s comments intact. Way to go Arizona Republic!

©Joyce Clark, 2013

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Sep 13

10

Quite ordinary

Posted by Joyce Clark on September 10, 2013
Posted in City Council Actions • City issue and actions • City of Glendale • Glendale elected officials  | Tagged With: , , , , , , , | 2 Comments

The September 10, 2013 meeting of the City Council has nothing earth shaking on its agenda but there are several items of note. There are 11 actions on the Consent Agenda (out of a total of 17 items) and 3 are note worthy. Item 7 is a Memorandum of Understanding with the Mesa Police Department. In it Glendale will pay $500 each ($1,000 total) for 2 police officer training slots. Typically Glendale sends its recruits to the Arizona Law Enforcement Academy (ALEA) at no cost to Glendale. With the recent economic recession ALEA reduced its program capabilities; hence the need to find an alternative training facility. The good news is that Glendale has already reserved training slots at ALEA for future recruits. But it brings up an interesting question. Glendale has a great deal invested in its Public Safety Training Facility. Perhaps it’s time to assess its functionality and to make plans for its use as a AZPost certified training facility for its police officer recruits as well as those from other NW valley jurisdictions.

Items 10 and 11, also on the Consent Agenda, deal with changes to council meetings and council guidelines. Item 10, if approved, will institute a prayer/invocation rather than a moment of silence at the start of council meetings. In an informal poll hosted on this blog site asking whether council meetings should begin with prayer, 67% polled said, “No” and 33% said, “Yes.” Humm…So much for representing the people. Unscientifically a majority of the poll respondents preferred continuation of a moment of silence. Item 11, if approved, formally institutes the Vice Mayor’s term running according to a calendar year, from January to January; term limits of 2 years for council service on council subcommittees; and staff will have 60 days rather than 30 days to respond to council items of interest.

The last item, Item 17, is an action I suggested would take place rather quickly and it has. On August 13 and August 23, 2013 a council approval of update of signature authorization occurred. After the removal of 4 city staffers and the appointment of Julie Frisoni as Interim Assistant City Manager this item will formalize those changes. If approved, authorized signators will be City Manager Brenda Fischer; Interim Assistant City Managers, Julie Frisoni and Jamsheed Mehta; City Clerk Pam Hanna; and Executive Director Stuart Kent. The City Manager will also be appointed as City Treasurer. It was just a matter of time. Remember the decks had to be cleared first.

Recently council moved its start time for evening meetings to 6 PM. This should prove interesting to all those who show up at 6 PM only to discover that council has called for an Executive Session at 6 PM and that the regularly scheduled meeting will occur at 7 PM after the Esession. It could make for some very confused, unhappy people.

Sometimes the best part of the meeting is the section allowing for council comments. Often they are quite ordinary – thanking someone or some organization or the offering of special recognition. Every once in awhile a councilmember gets off script and throws a bomb. Will there be any bombs at this meeting? Ya never know!

Two other events have occurred recently – IceArizona’s hiring of former Glendale City Attorney Craig Tindall and council’s alleged rapprochement with the Tohono O’odham. They deserve blogs of their own. Look for them in the coming days.

©Joyce Clark, 2013

FAIR USE NOTICE
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Sep 13

5

City staffers weigh in

Posted by Joyce Clark on September 5, 2013
Posted in City issue and actions • City of Glendale  | Tagged With: , , , , , , , | 2 Comments

In response to a request for any information about the cast of characters or the city hall environment in my Mushroom blogs I received emails, anonymous of course, from presumably city staffers, past and present. I do not know these email authors and their identifiers are names like “concerned citizen” and “deep throat.” From the insider information revealed it is quite clear that they are/were city personnel. Their messages lead me to believe that even with a new City Manager there remains an atmosphere of fear and intimidation.

I pulled some quotes that exemplify the majority sentiment of emails received to date. For example, “There were essentially 2 management teams – Ed’s inner circle & the leadership team.” It makes one wonder which group had the most juice.

Or this, “At agenda review it was a precursor to Council meeting where you were drilled & drilled…sometimes there was pre agenda review before the actual agenda review.” At one time I knew (now long since forgotten) which staffers were tasked with playing the roles of various councilmembers and that at times everyone would crack up because some staffers were really, really good at mimicking certain councilmembers.

There was tension at the time between Schurhammer and Carmicle. We get a glimpse with, “There was also bitter, AND I MEAN BITTER feeling between Budget & HR. Budget office had lots of problems getting info from HR.” A generalized assessment of Alma Carmicle as HR Director seems to be that she was in way over her head and relied heavily upon her staff.

With regard to the 4 staffers that either resigned or were terminated, “They were merely Ed’s good soldiers. And, yes, I get the fact that they should of (sic) told people, but everyone needs a job.” This comment brings up the proposed hotline for employees. With a hotline voices can be recognized and IP addresses can be found. Anonymity is not guaranteed. Consideration should be given to an Ombudsman who must remain neutral and can legitimately investigate allegations while maintaining the anonymity of the employee.

There are questions about Candice MacLeod’s expanded and more prominent role as Auditor with, “Candace McCloud now reports to Council. As I recall in the Charter, only certain positions report to Council and that was not one of them! Doesn’t that require a change in the Charter????” This is a concept that requires further specificity. The Charter states the City Council hires/fires its four direct appointees: The City Manager, the City Attorney, the City Judge and the City Clerk. On a regular basis these 4 appointees submitted either monthly or quarterly reports directly to the council. With this new scheme the City Auditor is not a council appointee yet must report directly to council. There will be an inherent conflict as the City Auditor is hired/fired and supervised by the City Manager. Who takes precedence? It would appear that would be the City Manager.

Lastly all agree on this, “Julie Frisoni was part of Ed’s inner circle. She knew most everything that went on and she was very much aware of the money situation.” Or, “She (Frisoni) framed every major press release and all information had to go through Marketing.” Another comment was, “She is unqualified to be in that position. As far as I know she does not have a Master’s Degree which HR policies says (sic) you need for that position.”

There you have it. Some brave staffers have found a way to weigh in. Please keep those emails coming to clarkjv@aol.com. Your voices are an essential part of the story.

©Joyce Clark, 2013

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Sep 13

4

A matter of convenience

Posted by Joyce Clark on September 4, 2013
Posted in City of Glendale  | Tagged With: , , , , , , , , , , | 3 Comments

Over the weekend one of the many emails I received asked questions about Acting Assistant Julie Frisoni’s role in the Early Retirement Program (ERP). What did Frisoni, at that time the Director of Marketing and Communications, know and when did she know it? The writer of the email, based on the information in the audit, asks why the marketing director was conveniently left out of any headlines in the paper.

A review of the external audit report page 22 states, “On August 19, 2009, the Arizona Republic requested information from the City regarding the ERP…” On the same page of the report it further states, “On May 21, 2010 the Arizona Republic made a second public records request for information on the ERP…” In an email dated August 26, 2009 from Pam Kavanaugh (at that time Assistant City Manager) to Alma Carmicle (at that time Director of Human Resources) with reference to the public information requests made by the Arizona Republic she states, “If it is Budget related Sherry can handle – if it is H.R. related you can handle. Please keep Marketing in the loop on what is occurring. Has the other information been released? Have the employees been notified?”

From the audit report (Frisoni was interviewed one time) it appears that Frisoni may not have known the details of the ERP until 5 months after its inception but she certainly knew the facts by August of 2009. She states in the audit report that the information she supplied to the media was based upon her reliance on information supplied by others such as Schurhammer, Kavanaugh and Carmicle. If nothing else, it appears that she could have been a conduit of disinformation to the media. City staffers continue to believe that as Director of Marketing and Communications, she participated in the weekly meetings of upper management. As a result of her presumed attendance at those weekly meetings they believe that she knew of the ERP from its inception and the disastrous results that ensued long before it became public knowledge. As City spokesperson the assumption can be made that she would have needed to know about potential negative news about the city in order to spin it in the most positive light possible. At times that may have required the omission of information. Why hasn’t the media questioned the level of her involvement? Perhaps it’s more convenient for them to overlook one of their own in the business. 

Will we ever know the truth, the whole truth and nothing but the truth? It’s doubtful. It looks like 4 staffers will take the fall while the roster of the unscathed continues to grow: Beasley, Kavanaugh, Lynch, Carmicle, Loeb, and Frisoni. Many Glendale residents feel that her appointment as Acting Assistant City Manager is a slap in the face because Frisoni was part of the regime at the time of extremely poor (and perhaps illegal) decision making. Residents are asking why some are made accountable yet others continue to skate? There are no answers here but perhaps we will get answers from the Attorney General’s Office some day.

On another note, the city council approved the hiring of Michael Bailey as the new City Attorney.  According to the media he left Surprise, AZ when he and the city could not agree on his compensation. Mr. Bailey previously worked for Glendale and has history as a result.

Lastly, city council held an Esession on August 4, 2013 after its workshop and guess what was on its agenda…again? Yep, the arena management deal. It could be a standard place holder for an Esession or it could signal that there is some issue still unresolved. This is the second time it’s been on an Esession recently. Makes you wonder, doesn’t 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

31

Daisy chain

Posted by Joyce Clark on August 31, 2013
Posted in City Council Actions • City of Glendale • Glendale elected officials • Glendale finances • Jobing.com arena  | Tagged With: , , , , , , , | No Comments yet, please leave one

Stories about Glendale keep popping up like daisies. The Arizona Republic takes positive glee in reporting negativism witness 2 hits on August 30, 2013. Paul Giblin did a story on the fall out of senior staff in the wake of the external audit and Laurie Roberts takes a pot shot at elected officials. Horatio Skeete, former Assistant City Manager, has been fired and Sherry Schurhammer, former Executive Director of Finance, has resigned. So the pound of flesh sought has been realized.  Make no mistake; they should not be absolved for they carried out the City Manager’s direction. Its’ similar, although not nearly as grievous, to those in Nazi Germany who either carried out Hitler’s directives or did not protest them. The reasons for silence in both instances were similar – fear of serious retribution. But they did not order the direction taken. Will those ultimately responsible be held accountable?

Laurie Roberts casts a wider net and accuses city council of mismanagement saying, “The mismanagement in that place apparently knows no bounds…” Mismanagement is defined as the exercise of executive, administrative and supervisory direction. How could council have given direction when senior staff conspired to hide the truth on actions it had taken by not advising council of the facts? If she had read the external audit thoroughly she would have read on page 19 of the report, “From the onset of the ERP, City Management and staff failed to keep the City Council appropriately informed, at times misled them and/or provided incorrect information. Under the previous administration, City staff was hindered and/or prohibited from providing valuable information to the City Council.”

The news media also reported that former Glendale City Attorney, Craig Tindall, has been hired as General Counsel for IceArizona, the new owners of the Coyotes. This development is not so surprising. Mr. Tindall was intimately involved in all of the arena management deals council considered.   I had several telephone conversations with Mr. Tindall during negotiations of various arena management deals over 4 years. I am sure others on council had similar conversations. There was one conversation in particular that stuck in my memory. I did not record it. I did not take notes but it was unusual enough that I remember the gist of it. During the course of the Jamison negotiations, Mr. Tindall alluded that he had been contacted by other, serious buyers of the team and if the Jamison deal fell through there were others waiting in the wings. It is not hard to imagine one buyer could have been Anthony LeBlanc. Mr. Tindall never named anyone. What did Mr. Tindall share with these other serious buyers that was not privileged or confidential information about contract negotiations? We’ll never know but it appears that some of these serious buyers could have been grateful.

To the news media Glendale has turned into the entrée of the day. Slow news day? I can hear it now. Editor: Geez, there’s not much happening right now. Let’s have Giblin write another story about Glendale. Problem solved. You can tell when it’s a slow news day – just look for a regurgitated story about Glendale. They have created a daisy chain of stories about Glendale, day after day, citing the same information over and over and over again.

I’ll be blogging again after Labor Day.

©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

26

Mushrooms, Part 3

Posted by Joyce Clark on August 26, 2013
Posted in City Council Actions • City of Glendale • Glendale elected officials • Glendale finances  | Tagged With: , , , , , , , , , , | 1 Comment

RESULTS

My previous blogs reviewed the cast of characters, the items under investigation, the city hall atmosphere, and the how, why and what was done. Now it‘s time to look at the results that the external audit produced. The following recommendations are relatively easy to implement and some have already occurred. Frankly, that’s the easy part. These recommendations will enforce and safeguard sound, fiscal policy positions for the city.

  • The City of Glendale should implement an anti-fraud program that would include the following:
  • Conduct a fraud risk assessment to identify areas that are vulnerable to fraud, waste and abuse and/or employee misconduct;
  • The City should implement a code of conduct and provide training for that code;
  • Create an ethics hotline where callers could be allowed to provide information anonymously. The calls should be investigated (by whom? At the very least, a third party, neutral, should be used. Perhaps it’s time to create an Employee Ombudsman) thoroughly and immediately with reports provided at least quarterly to the City;
  • Implementation of the ethics/antifraud program should be communicated to all levels of employees.
  • Retention policy for emails/server information should be reconsidered. Sixty days for email backup is not adequate for litigation and investigative purposes. The minimum should be one year.
  • Decisions on significant programs, such as the ERP, should be supported by sound financial analysis and supporting documentation discussing both the short-term impact, and potential long-term impact of the program. It should also document City Management’s consideration and reasoning for recommending or implementing such a program.
  • Have Risk Management and Workers’ Compensation trust fund boards meet more frequently than once a year. (Already implemented before I left as Chairperson)
  • City should evaluate its current policies and guidance as to required authorization for transfers and revise if necessary. These policies should be assessed by City attorneys for consistence with applicable statutes, regulations and ordinances. (The City Attorney Office’s oversight has been nothing short of abysmal)
  • Revise charter/ordinances to require the notification and/or involvement of the City Attorney over all significant transactions.
  • To the extent that budget appropriations transfers are a practical necessity during the year, update or revise the policies to clearly set out what is and is not permitted, as well as what transfers and when those transfers must go for City Council approval.
  • To the extent that the City desires to pay certain administrative costs and salaries related to the appropriate trust fund purposes [as with other cities] -ordinance or amendment to governing documents should be considered and approved by City Council to authorize these expenditures. (Had been proposed to Council but not yet implemented)
  • Premium levels charged to City departments are subject to the recommendations and the discretion of the City Management. Premiums should be based on sound long-term evaluations rather than by short-term cash needs.
  • Significant changes in trust fund premiums (e.g. >20%) paid by City departments should be authorized to the City Council in advance.
  • City Auditor should report directly to the City Council rather than the City Manager. This recommendation has already been made implemented.
  • The City’s external auditor should be engaged to perform at least an annual audit of internal controls.

REPERCUSSIONS

This is not an easy topic nor are there any easy fixes. Today’s City Hall environment is positively toxic. Hopefully the new City Manager will make it her priority to reverse this situation. Obviously politics is not confined to politicians. It’s pervasive throughout this city organization and can be found in every other city. It’s not an aberration confined only to Glendale. When Beasley came on board as City Manager, if nothing else, his control of the organization was absolute and during his tenure political intrigue simmered under the surface but never erupted into outright warfare.

When he left all hell broke loose. Two staffers, Assistant City Manager Horatio Skeete and City Attorney Craig Tindall, were within shouting distance of grabbing ultimate power, that of Interim City Manager. Both probably felt that an outstanding performance could land them the job permanently. Each had their supporters and detractors but vied for the job in dramatically different ways. Craig Tindall’s supporters, were rumored to include among others, Jim Colson, Economic Development Director; Julie Frisoni, Communications and Marketing Director; Fire Chief Mark Burdick and City Auditor Candace Macleod. It is assumed that they knew or at the very least had suspicions of or had heard rumors about the ramifications of the ERP before its eventual disclosure. If they knew and said nothing until disclosure became useful then they are complicit in the cover up. They finally released information about the Trust Fund transfers and the Employee Benefit Program in an effort to smear Skeete. There was no mention of the City Attorney Office’s failure to provide oversight over the ERP. We’ve all heard the phrase that ignorance is no excuse in the eyes of the law.

This information was released despite the fact that these decisions were Beasley’s, not Skeete’s. After all, Pam Kavanaugh as Assistant City Manager began the implementation and then retired. When Skeete assumed that role, he was tasked with continuing the implementation. I once asked Skeete why he didn’t play the same game and he told me that was not how he wanted to get the job. There were no monkeys on Skeete’s desk. Council chose Skeete as Interim City Manager and rejected the tactics employed by the Tindall faction.

If council had been informed of the facts when the ERP was first implemented different direction would have been given to the City Manager. To say we were not informed by city management is an understatement. Many of the allegations came to light after Beasley had retired. If the Workmens Compensation and Risk Management Trust Fund Boards had been told the truth reforms could have been instituted.

Now there is a new regime in city management with a new City Manager and soon, presumably a new City Attorney. Heads are rolling with Bolton, Goke, Schurhammer and Skeete placed on administrative leave. It is a strong signal that poor decision making based on a lack of integrity will not be tolerated. The first appointments by City Manager Brenda Fischer are Frisoni as Acting Assistant City Manager and Macleod as Interim Finance Director both of whom appeared to have been actively embroiled in the Interim City Manager warfare. What about Jamsheed Mehta, Stuart Kent, Jon Froke and Erik Strunk who kept their noses clean, hunkered down and did their jobs? What kind of signal has been sent through the organization? House cleaning of a selected few while others suffer no retribution for their actions or lack of disclosure until it became useful does not bode well.

AND THERE’S MORE

The call for an external audit was Norma Alvarez’ baby aided and abetted by a newspaper, the Glendale Star, that appears to have become the mouthpiece for her agenda. She obviously hoped for two outcomes from the audit: finding a pot of gold that somehow had been overlooked; and placing blame directly on former councilmembers. Neither outcome was achieved but it has made her vindictiveness apparent for all to see. She had publicly stated that after the external audit became public she would resign. To date that has not happened but it should. Her contributions to Glendale governance are non-existent. Now she says she will not run again in 2014 but reneging on her promise to resign now signals that she may change her mind as it gets closer to the time to declare reelection intent.

AND THERE’S MORE STILL…MUCH, MUCH MORE

Then there is the question of former mayor Scruggs. Was she involved? That is your decision to make. She has many supporters to this day who will reject the notion of any involvement. I am not a supporter having worked with her for 16 years. Many inside and outside of City Hall were quite aware of her ambitions and her modus operandi. We were never personal friends and for many years were often diametrically opposed on policy issues. Various staffers would often remark privately that there was nothing that went on in Glendale that she did not know about and either approved or disapproved.  In retrospect it appears that this assertion by those staffers seems to be quite accurate.

Below you will see 2 emails that require some explanation.  A Glendale resident, a very intelligent gentleman, now deceased, who had been CEO of several well known national corporations, became concerned about the bonds being issued by Glendale for construction of the arena and surrounding infrastructure. He made a series of Freedom of Information queries. During the course of his inquiries he often updated his progress via email. These are but two of many. The first email forwarded to me relates to the former mayor’s treatment of this gentleman after he spoke publicly about his concerns. The second email on which I was copied, confirms her extensive knowledge of arena finances and her need to know everything. The names of individuals and the topic raised at the time are not pertinent to the illustrations being used to offer some insight into her behavior.

First email********************

From: XXXXX

To: XXXXXX

Sent: Monday, April 17, 2006 6:05 PM

Subject: Re: FOI items for Friday

I included the entire exchange because this XXXX gentleman (XXXXX) is asking Glendale some critical questions about the Arena deal. They aren’t answering. He went to Council, waited until the end and stepped up with his questions. Elaine took him aside and berated him for saying these things on Glendale TV. She “doesn’t want the sort of thing out there for the citizens who don’t understand to see”. Scroll down to the last message he sent me. Elaine listened in on a conference call this man had with the financial people of Glendale. She is hiding something…he is close to it….

Second email******************

From: XXXXXX

To: XXXXXXXXX

Cc: XXXXXXXXXXXXXXXX

Sent: Monday, April 17, 2006 6:37 AM

Subject: Re: FOI items for Friday

Hi! I called Mr. Schuey (sp.?) at nine am on Friday, as planned, for an hour. I said that I expected to talk primarily to Steve Szymanski because he is closest to the data I desire. He said Steve’s boss would be taking his place instead. I asked who was on the line with him. He said that Steve’s boss, Art Lynch, Mr. Perkins (sp.) and Mayor Scruggs were also there!!!! I wasn’t surprised. I couldn’t tell who was doing the talking, but at least the Mayor kept silent (an amazing act of constraint). With such a large cast of characters, I didn’t expect much. They did clarify some things. 

For example, they said that 4 bond issues were for infrastructure only ($30Million), so not with the Taxable, Tax exempt and a small issue associated with the Arena. All together, the total bond amount is $180Million (Arena plus infrastructure). “They” said that I should only be concerned with the Arena bonds, even though in the budgets all six were together. They said that two of the smaller bonds had been dedicated to other purposes via ordinances passed some time ago. In summary they seemed to be defensive on this small issue. I said that I would concentrate on the two Arena bonds and one small one ($150Million), which is my main interest.

 

They went on about their AAA rating and that Mr. Perkins was their expert, etc, etc. and that they had sculptured the Bond allocation to make it easier to keep the early years payments lower so that their payments would not be too tough at first.

 

This was said because I had previously told Art that the distribution used caused a lot of excess Interest. They don’t like criticism.

So, not much accomplished.

Regards, XXXXXXX

These emails are illustrative of the belief by some people that the former mayor was involved in the slightest minutia of Glendale operations and especially when the issue was a “hot topic.”  What did she know about the Early Retirement Program (ERP) and when did she know it? According the findings of the external audit report the ERP was initiated in March of 2009. At the end of the same month (March, 2009) at the first FY 2010 council budget workshop it is now evident that she had knowledge, not readily available or shared with the councilmembers, of the program’s costs as can be seen from the questions and statements she made relative to the issue. Her actions raise more questions that remain unanswered. Many readers of this blog have knowledge of or examples that attest to her intense and perhaps sometimes, inappropriate, involvement in city affairs. If anyone cares to share please send an email to clarkjv@aol.com. Your information will be handled discreetly.

There you have it – the players, the City Hall climate, the actions taken and the repercussions. It’s not a pretty picture. If you are as angry and disgusted as I, you have every right to feel that way. It’s a bitter chapter in the history of Glendale that occurred on the watch of former City Manager Ed Beasley (retired 2012)/Interim City Manager Horatio Skeete (on administrative leave, 2014) and former Mayor Elaine Scruggs (retired 2013). The mushrooms were former Vice Mayor Steve Frate (retired 2013) and Councilmembers Clark (me, retired 2013), Martinez, Lieberman, Knaack and Goulette (former Ocotillo CM prior to 2010)/ Alvarez (current Ocotillo CM from 2010 to present).

The reforms and controls that will be adopted will help to restore confidence in a financial system run amok. Could it happen again, if not in Glendale, somewhere else? Yes because we are all fallible and can make disastrous decisions. You cannot legislate good character, morality or integrity.

©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

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

23

Mushrooms, Part 2

Posted by Joyce Clark on August 23, 2013
Posted in City Council Actions • City of Glendale • Glendale elected officials • Glendale finances  | Tagged With: , , , , | 3 Comments

In my previous blog I outlined the cast of characters, what actions were to be investigated and the city hall atmosphere when these actions were taken. In this article we’ll look at what was done and how it was done. Before that, there is the why. The “why” is based upon assumption. Some of the actions were taken as early as 2008. The city was on the precipice of a great National Recession.  City revenues were declining. The city was facing a budget shortfall of over $14M. Rather than provide direction to city council to begin to make the necessary cuts, including employee terminations, management staff tried to avoid the cuts with other strategies. They were protecting their turf and the jobs of many employees. They thought they were not only staving off inevitable employee cuts but that their strategy would buy the necessary time needed to weather the recession. Their options were limited and they chose actions that produced disastrous consequences when discovered five years later, in 2013.

What did they do? When did they do it? How did they do it? They set their sights on an Early Retirement Program (ERP). They touted that it would result in cost savings in excess of $5M.

What they failed to take into account was how much this program would cost to implement – a price tag of $6.1M. The program was far more popular than they anticipated and 55 employees, many of them middle to upper management representing upper pay ranges and serious money, took advantage of it.  Costs started to balloon. $1.34M in retirement incentive costs; $1.36 in vacation and sick day payouts; but worst of all, the Arizona State Retirement System slapped on a penalty of $2.75M. How could they have not seen it coming? Scottsdale tried the same ERP in 2009 and incurred millions of dollars in penalties. The State Retirement Laws had changed in 2004. Why was no one in then City Attorney Craig Tindall’s office aware of the changes in the law? Why did no one in the city attorney’s office review current law on the use of ERPs when Alma Carmicle first proposed the idea in the fall of 2008? Ignorance is not a legitimate answer, especially at the time of ERP’s publicly advertised implementation in 2009. The city attorney’s office should have been all over it.

Unfortunately, the report does not answer those questions. It merely paints a picture of what was done. Even when staff realized that there were penalties associated with using ERP, the assumptions staff provided to and used with the State Retirement System representatives were woefully under reported. Now staff, in desperation, had to find the money to cover the ERP expenses and the state assessed penalties.

They turned to the Workmens Compensation Trust Fund (WCTF) and the Risk Management Trust Fund (RMTF) as sources to fund the ERP. Then to compound their actions they used a “premium holiday” concept which involved withholding the city’s portion of payment to the Employee Benefits Trust Fund (EBTF) eradicating its stability as well.  They withheld $83 thousand per month for a total of $1M/year in both 2008-09 and 2011-12 from the EBTF. The trust funds, especially the WCTF, began to experience shortages. Over a period of two years (2010-2012) $2.6M was transferred from RMTF to the WCTF. All the while they publicly assured city council and the general public that cost savings from the Employee Retirement Program was being generated.

That brings us to Art Lynch’s retirement as Assistant City Manager in October of 2009 and the use of his consulting firm, SRJ Consulting. Mr. Lynch was part of Mr. Beasley’s “inner circle” of trusted advisers. One could assume that Mr. Beasley wanted to make sure his friend was financially comfortable before he, Beasley, retired. So began a series of highly questionable actions performed by Mr. Beasley. Employees, in order to be eligible for the ERP, had to meet a deadline of March, 2009. Mr. Lynch did not retire until October, 2009. By placing Mr. Lynch in the ERP it added another $121,000 to the State penalty. Mr. Beasley approved Mr. Lynch’s participation in the ERP and in fact, granted Mr. Lynch an extension to accomplish that objective. Mr. Beasley also approved an additional $25,000 in deferred compensation to Mr. Lynch. The day after Mr. Lynch’s retirement, he returned to duty as SRJ Consulting, with a contract that never went out to public bid. As a consultant, over several years, SRJ Consulting received nearly a million dollars. These maneuvers cost the city an additional half million dollars. This information is available on pages 23-24 of the external audit report.

It was generally assumed that Ms. Alma Carmicle was also a member of Mr. Beasley’s “inner circle” and a trusted adviser to him. Some people might view Ms. Carmicle’s job arrangement as an example of “power corrupts and absolute power corrupts absolutely.” In the summer of 2010 Ms. Carmicle moved permanently to Mississippi and Mr. Beasley approved her job retention via telecommuting. This accommodation lasted until her retirement in February of 2012. The rationale for allowing her to stay on as a full time employee through the use of telecommunication was that Mr. Beasley felt that she was needed to negotiate the public safety Memoranda of Understanding (generally recognized as union contracts). Mr. Beasley certainly led me to believe that he was heading up the MOU negotiations. From October of 2011 until her retirement in February of 2012 Ms. Carmicle participated in 26 MOU meetings/telephone calls lasting a total of 13 hours and 55 minutes. During those four months Ms. Carmicle managed to give the City of Glendale almost 14 hours of her time, talent and expertise. Yet she was paid as a full time employee. All of her other duties as Human Resource Director had been absorbed by Mr. Brown, the Assistant Director. During this time Ms. Carmicle received her full salary and car and phone allowances estimated to be about $140,000. This information is available on page 25 of the external audit report. Was it blatant cronyism in the cases of Lynch and Carmicle? You decide.

These were the major issues of the external audit: city nonpayment to the Employees Benefit Trust Fund as “premium holidays” so that those funds could be used else where as needed; transfers from and between the Risk Management Trust Fund and the Workmens Compensation Trust Fund to cover the costs incurred in the Employee Retirement Program; and the unusual job arrangements for Mr. Lynch and Ms. Carmicle.

Ms. Goke and Mr. Bolton are the latest to fall. They have been placed on leave by the new City Manager Brenda Fischer and Candace Macleod, the City Auditor, has been appointed as Interim Executive Finance Director. The bodies are starting to pile up…Skeete, Schurhammer, Goke and Bolton. I am sad on one hand because these are people I admired and respected professionally. I knew and liked some of them personally. I sought their advice and counsel on city matters for years. Did they hide other information from me when I went to them on city issues? They destroyed any semblance of trust and abdicated their fiduciary responsibilities to the city. I am outraged that they could sit before us at budget workshops and hide the truth. Yet they are just the fall guys. They did not make the final decision to implement the ERP program – City Manager Beasley did, presumably after consulting with his “inner circle” of trusted advisers. The four on leave (and others) were directed to make the program work and later told what they could and could not say about the results of the program. They could have but chose not to, blow the whistle. In that atmosphere at that time they may have felt they had no choice. Does that make them less responsible and accountable for their participation? No, of course not. Yet they are not the lead actors in this sordid drama. Some of those who refused to be interviewed were the decision makers and should be held accountable. Will there be criminal or civil action against the major players? I am not an attorney and could not begin to guess. Remember, I am but a lowly mushroom.

Next up…results, repercussions and much more.

©Joyce Clark, 2013

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