October 19, 2017 | Meeting Notes

  1. BOND OVERSIGHT COMMITTEE
  2. In promoting the street paving bond, which we voted in favor of, the City anticipated replacing 140 miles of pavement. This turned out to be “lane miles” (one mile of a four lane street equals four lane miles.) To date, the City has completed 105 lane miles and spent $8 million of the $12.5 million authorized. The project is in its second of three years and completion is projected at September of 2018. After the bond funds are spent, paving projects will be paid from the Capital Improvement Fund which, of course, is our tax dollars.

    We also passed a bond for fire stations. The first at Jomax and Hayden started construction in July and is on budget and scheduled for completion in May of next year. The second is a renovation of the station at Shea and 74th Street.  Construction started last month, is about $46,000 over budget due to unforeseen HVAC issues, and is scheduled for completion in January of next year. The third is near Indian Bend and Hayden. It is in the planning process and is $640,000 over budget due to land acquisition costs. The overrun may increase due to legal costs.  The final station at 110th St and Cave Creek is in design. The site requirements are more extensive than anticipated and may be over budget.  For the entire fire station project, there is a built in contingency amount of $1.7 million, so it appears that, in total, the costs will be close to or perhaps a little below the bonded amount.

    The combined amount that we approved was $28.85 million. None of the bonds has been issued. Instead, the City has “borrowed” the money for the first part of the projects from other temporarily unused city funds, thus saving taxpayers interest.  The City Council has approved the planned sale of the bonds. The bonds are expected to be sold this coming January. The bonds will be of varying durations (one year, two year, three year, etc.) which saves in interest costs. Shorter term bonds are usually less expensive than longer term.

  3. ELECTIONS
  4. It may seem a little early, but we will have a City Council election at the end of August.  Terms are ending for Councilmembers Littlefield, Milhaven and Smith. Linda Milhaven and Kathy Littlefield have announced that they are running.  Dave Smith has not yet announced.

  5. LAWSUIT
  6. Back in 2015, two motorcyclists were killed when they collided with a car at a traffic light signaled intersection while participating in a Special Olympics charity ride. Scottsdale was sued, along with the Special Olympics and the motorcycle dealership which organized the event. The allegation was that the City was negligent and should have had traffic control officers at the intersection. After arbitration, the City was found 1/3 responsible and will pay about $167,000. This will be paid from the City’s operating budget. Of particular note is this quote from the City Council Report: “Scottsdale has a long standing practice of including paid tort settlements over $20,000 in the primary (property) tax rate to reimburse the Self-Insured fund for payment of the claim.

  7. GAMBLING MONEY
  8. The City will receive $1.2 million from the Salt River Pima-Maricopa Indian Community . This is an annual distribution of a share of tribal gaming revenue approved by Arizona voters in 2002. The money is allocated by the tribe based on the tribe’s evaluation of proposals  from eligible local governments and non-profit organizations. Some of the recipients are Arizona Humane Society $50K, Ryan House $125K, SCC $100K, Desert Discovery Center $20K.

  9. WESTWORLD
  10. We taxpayers have just funded $330,000 for a paved parking lot, $160,000 for electrical improvements and $377,000 for portable RV pedestals at Westworld, plus $12,500 for associated operating costs. That is a total of $879,500. The lone dissenter was Linda Milhaven. The purpose is to improve the facility, primarily for the Barrett-Jackson Car Auction and the Arabian Horse Show.  According to the City, the bulk of these expenses will be paid through taxes on hotel rooms, gasoline purchases and local sales taxes.  In fiscal year 2015-16, Westworld operated at a $1.8 million deficit. In addition, the City pays about $3.8 million in debt service on the $54 million construction and expansion costs incurred previously. Councilmembers Guy Phillips and Suzanne Klapp, who serve on the Westworld Subcommittee, were enthusiastically in favor of the projects. Guy feels that, eventually, the red ink will disappear as more and more events come to Westworld.

  11. MUSEUM OF THE WEST
  12. The Tourism Development Fund (bed tax) can be a pretty good piggy bank. City Council voted 7-0 to give $500,000 to the Museum of the West which is in its third year of operation.  This money is to be spent in support of the museum’s educational program. The rationale, according to a City Council report, is “Museum does not currently have sufficient financial resources to fund the educational activities…without the immediate financial support of the City.” Perhaps a large part of the reason for the lack of funds relates to attendance. The consultant’s projection for 2016 attendance was about 93,000. Actual attendance was about 54,000, for a shortfall of 39,000. The Museum attracted about 60% of projected attendees.

  13. FASHION SQUARE
  14. City Council debated a Fashion Square rezoning bill in August. A request to increase allowable building height from 84 to 150 feet (an increase of 66 feet) was the most controversial item in the bill. The rational expressed by City staff was that the extra height may encourage users who would not consider the site as currently zoned.  In order to get approval for the 150 foot height, the developer agreed to contribute about three quarters of a million dollars to the Downtown Cultural Trust Fund. This extra 66 feet works out to a little over $11,000 per foot. The item was passed with Littlefield and Smith dissenting.

  15. MOUNTAIN PRESERVE TRAILS
  16. City Council awarded two contracts for design, construction, renovation and rehabilitation projects on Mountain Preserve trails. The two year maximum is $4 million, and the contracts may be renewed for three additional one year terms with a maximum of $2 million each year. The agenda item indicates that this contract will not encumber any City funds because funds are available in various Capital Improvement Plan projects. I believe that this means Preserve bond funds. This was approved 7-0 on the consent agenda.

  17. CAPITAL IMPROVEMENT PLAN SUBCOMMITTEE
  18. This subcommittee was created recently to analyze various capital projects and recommend priorities to the full Council. The members are Korte, Phillips and Smith.  At a recent meeting, there was a lot of give and take about whether the subcommittee or City staff would be the first   to offer up a list of priorities. I think the end result was that they are both going to do a list and then compare and refine them into one list. There is a consensus that, when matching funds are available (such as Maricopa Association of Governments road funds), the Council should prioritize so as to be eligible for the funds before they are lost to other Valley projects. So we should see road and flood control projects at the top of the priority list.  And sure enough, at this past Tuesday’s full Council meeting, the Council approved funding totaling a little over $10 mil broken down with $2 mil for Rawhide Wash flood control, $1 mil for Reata Wash, $3 mil for improvements to Happy Valley Rd-Pima to Alma School and $4.4 mil for improvements on Pima from Pinnacle Peak to Happy Valley. The vote was 6-1 with Kathy Littlefield voting against. Kathy wanted separate votes-one on the flood control issues and one on the street projects.  Potential future projects that may be near the top of the priority list are: Cactus pool, Civic Center Library improvements, another new fire station, downtown parking garage, parking for Westworld and golf tournament, downtown stadium improvements, and, last but not least, the Desert Discovery Center.

  19. DESERT DISCOVERY CENTER/DESERT EDGE
  20. And, speaking of the DDC, it now has a new name-Desert Edge.  The design is done and presented to the Council. The broad parameters are a $62 mil facility to be built on 5 acres and located at the Gateway entrance to the Preserve on Preserve land. Also included is an offsite parking area for 250 cars. Using the 80 acre site owned by the City near the Gateway for the parking area is being considered. This is the 80 acre parcel on which the City pays $3 mil per year in debt service. Desert Edge is controversial. Proponents argue that it will be a tourist draw and will enhance the Scottsdale experience, and that voters authorized it when we voted for the Preserve taxes. Opponents say voters only authorized land purchases, trails, and minor trailhead facilities. Putting aside the actual issues, the current hot button for the Council is whether or not we citizens should have an opportunity to vote on whether or not to build the center. We heard Linda Milhaven, at last month’s meeting, say that, in her opinion, we already voted in favor of the project twice when we approved the sales tax initiatives to fund the Preserve land purchases. Linda, Suzanne Klapp and Virginia Korte have said that they do not want us to vote. Councilmembers Littlefield and Phillips, along with Mayor Lane have said they are in favor of putting the issue on the ballot. Councilman Dave Smith has not stated his preference. In addition, a lawsuit initiated in part by Tea Party member Pat Shaler, has been filed. The suit alleges that City Council has misappropriated $1.76 mil for the design of a facility that cannot be constructed without the consent of 2/3 of the Council and also a majority of the voters.  They point to Article 8, Section 11 of the City Charter which states that the Council has the authority to remove from preserve designation only parcels less than 1 acre and only with a 2/3 vote (5 of 7) of all members. The Desert Edge is 5 acres. The Charter goes on to say, and this is the key point, that “removal of the parcel designation from any other parcel of land shall require approval by an affirmative vote of 2/3 of all members of the council, but shall not become effective unless submitted by the council to the electors and approved by vote of the majority of votes cast at the election.”  In short, building on more than one acre in the Preserve requires 5 Council votes and an election.