HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 3/20/2007 *PLEASE NOTE: Since the Glendale City Council does not take formal action at
the Workshops, Workshop minutes are not approved by the City Council.
MINUTES
CITY OF GLENDALE
CITY COUNCIL WORKSHOP
MARCH 20, 2007
1:30 P.M.
PRESENT: Mayor Elaine M. Scruggs, Vice Mayor Manuel D. Martinez, and
Councilmembers Joyce V. Clark, Steven E. Frate, David M. Goulet,
Yvonne J. Knaack, and H. Phillip Lieberman
ALSO PRESENT: Ed Beasley, City Manager; Pam Kavanaugh, Assistant City
Manager; Craig Tindall, City Attorney; and Pamela Hanna, City
Clerk
1. ARIZONA SUPER BOWL HOST COMMITTEE 2011 BID REQUEST
CITY STAFF PRESENTING THIS ITEM: Ms. Debi Willis, Sr. Management Assistant;
Ms. Jennifer Reichelt, Deputy Communications Director; Ms. Karen Churchard, Mega
Events Consultant
This is a request for the City Council to provide direction on a request from the Arizona
Super Bowl Host Committee (Host Committee) to support a bid to host Super Bowl XLV
in 2011.
The deadline for the Host Committee to submit a bid to the National Football League
(NFL) is April 2, 2007.
On Friday, February 9, 2007, staff received materials from the Host Committee with
regard to the City of Glendale's requirements for the NFL Bid for Super Bowl XLV in
2011.
Michael Kennedy, chair of the Host Committee, presented information regarding the
committee's request at the February 20, 2007 City Council workshop.
The Council directed staff to work with the Host Committee regarding proposed
Glendale bid expectations and return to a future workshop.
On Monday, March 5, 2007, staff had a positive meeting with Mr. Kennedy, Ms. Debbie
Wardrop and Ms. Sallie Sargent to discuss the bid elements related to Glendale. The
meeting focused on three major topics:
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o The city's estimated $3.5 Million in expenses related to a 2011 Super
Bowl and the city's need to look for opportunities to generate revenue to
offset these costs;
o The Host Committee position on Major Event Public Safety
Reimbursement Fund legislation; and
o The identification of 30,000 parking spaces required by the NFL.
The Host Committee representatives understood city expenses and the need to identify
revenue-generating opportunities. Chairman Kennedy said he would talk with the Host
Executive Committee regarding support for the public safety reimbursement legislation.
The Arizona Super Bowl Host Committee will submit 14,000 stadium parking spaces as
part of the total 30,000 spaces required for the NFL bid specifications. The City of
Glendale will provide its 11,385 already programmed spaces. Discussions are taking
place between the Host Committee and Glendale Arena for the additional parking
spaces required to meet the 30,000 spaces.
Staff was also directed at the February 27th meeting to come back with additional
information including:
1. Data on the return on investment for Glendale for Super Bowl 2008
2. An accounting of the $7M allocated for "National Events," including how
much is remaining and what will be spent on the 2008 Super Bowl
3. Data on the return on investment from the 2007 Fiesta and BCS Bowls
4. How much is spent annually in Glendale for Special Events and Tourism
produced by the city?
5. What is the return on investment for these events?
6. Data/statistics on the number of media references made to Glendale based
on the Super Bowl and how much these references would have cost in real
dollars
7. Quantification of businesses/development attracted to Glendale because of
the 2008 Super Bowl
The city has engaged the services of Elliott Pollack to complete an economic impact
analysis related to the Super Bowl that will address item one. Information will not be
complete until the 2008 Super Bowl has been held and assessed.
Preliminary information regarding the National Events Fund indicates net costs to the
city at $3,423,000 leaving a fund balance of $3,577,000. 2008 Super Bowl
supplementals coming forward for Fiscal Year 2007-08 (FY07/08) equal $3,411,000.
Background information on items three through six were included in the Council
Communication.
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With regard to item seven, staff has consulted with economic development experts who
have indicated that it is not possible to predict or quantify the future related to Super
Bowl business development. Economic impact and business attraction/development
can only be measured after the event; however, due to the complex nature and
reasoning organizations may employ in their decision to locate to Glendale, the Super
Bowl may not be the only contributing factor to development.
On the afternoon of Thursday, March 15, 2007, the Host Executive Committee met to
discuss future support of Major Event Public Safety Reimbursement Fund legislation. It
is our understanding that, during that meeting, the Host Committee agreed to move
forward with the concepts that were discussed during the March 5, 2007 meeting. It is
further our understanding that the Host Committee has agreed in principle to support
legislation to assist Glendale for public safety reimbursement and agreed to seek
revenue generating opportunities to offset Glendale's expenses. This, in conjunction
with the Host Committee's affirmation that Glendale staff will work directly with the Host
Committee and NFL should we be successful in the 2011 bid, meets the previous
requests that were made.
Hosting an event of the magnitude of the Super Bowl brings great prestige and
promotion to Arizona, the Valley, and Glendale. Once Super Bowl XLII is held next
year, a comprehensive assessment of both the expenses and revenues to Glendale will
be completed.
This bid can be anticipated as the normal outcome of having a state-of-the-art facility in
our community.
Staff is requesting that Council provide policy direction related to the Arizona Super
Bowl Host Committee's request to support the Super Bowl Bid for 2011.
If directed to move forward the supporting resolutions will be brought forward for a
formal vote at the March 27, 2007 City Council meeting.
If the bid is awarded, staff will provide funding options for the $3.5 Million projected
expenses via legislation or budgetary set-asides over a period of time based on the
date of selection.
Ms. Jennifer Reichelt, Deputy Communications Director, stated that there had been a
definite return on a marketing investment for the City of Glendale as an international
sports and entertainment destination evident in the PR and media exposure, tourism
inquiries and the special event economic impact. Events like the bowl games and the
Super Bowl bring new visitors to the city as well as showcase the City of Glendale to a
nationwide and international audience.
She stated that the City of Glendale received unprecedented media coverage during
the months of October, November, December and January. She noted that Glendale
was mentioned 8,487 times in print and Internet stories. She explained that on January
8r there were 102 Glendale mentions on the local television broadcast, which equates
to more than $100,000 dollars in free publicity for the city. She said that the Glendale's
Visitor's Center had record activity, including phone calls, e-mails, walk-ins and request
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for information as a direct result of the bowl games. She added that while the city has
not conducted an ecomomic impact specifically on tourism, they do have a study that
shows that for every dollar spent on advertising it generates $238 in direct spending. In
addition, more than 500,000 people came to the city specifically to attend the special
events. She stated that 70 Million was the combined number of people who watched
the Fiesta Bowl and the BCS Bowl who before January is had probably never heard of
Glendale Arizona.
Ms. Karen Churchard, Mega Events Consultant, gave a slide presentation on mega
event funding. She stated that the City of Glendale created a reserve fund to pay for
citywide improvements, infrastructure and operations relating to the Fiesta Bowl, BCS
Bowl and Super Bowl events. The fund totaled $7 Million with the ending balance
$3.577 Million with $456,000 in reimbursements. She said that the expenses to date
were $3.879 Million; $3.187 Million are paid to date with a $692,000 of outstanding
expenses.
Mayor Scruggs requested that additional information be given out to the media and the
citizens of Glendale in regards to the $7 Million event fund. She said she believes not
everyone is clear on what the fund is being used for or what it was initially set up to do.
She asked Ms. Churchard to proceed slowly and thoroughly with her break down of
expenses. She added that the monument signage was also an expense coming out of
the event fund in the amount of $452,000.
Ms. Churchard provided a break down of the expenses. Infrastructure was $1.24
Million for right away improvements. Public safety expenses to date were $1.234
Million with an estimated $653,000 of outstanding expenses. Marketing expenses to
date were $712,000, which was spent for media and Glendale tourism efforts with an
estimated $39,000 in outstanding expenses. She stated that $3.3 Million was what had
been spent to date with $3.577 Million left over.
Mayor Scruggs noted that the travel expenses related to the mega events had not been
added to the tally. She anticipates them to be forthcoming as a one-time expense.
Mr. Beasley asked Ms. Churchard to further explain the parking situation.
Ms. Churchard stated that the NFL has requested them to identify 30,000 parking
spaces outside of the 300-foot perimeter. She said that there were 14,000 in the
stadium parking lot that will be identified toward the 30,000 number as well as another
11,350 that the city has identified. The arena has approximately 5,500 to 6,000 in
identified parking spaces. These are the numbers that the Bid Committee will be
presenting to the NFL.
Councilmember Clark calculated the numbers again, noting that the only ongoing
expenses were Public Safety and Marketing. She asked if they had considered inflation
when estimating these figures. Ms. Churchard stated she did not know the exact
figures in regards to inflation, however believes it would not be that high.
Councilmember Clark inquired if there was any way they would know if a business had
relocated to Glendale specifically because of the bowl games. Ms. Reichelt stated that
those were some of the many issues that will be studied and brought forward for review.
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Mr. Beasley added that it could be impossible to adequately identify these sorts of
issues because of the many factors that may bring someone to Glendale.
Councilmember Clark commented that this was a tremendous opportunity; however,
she added that it was also a lot of work and pressure on the staff.
Councilmember Frate stated that the infrastructure improvements have benefited his
district greatly. He added that had it not been for this fund, the wait for doing
improvements would have been up to ten years. He said that the surrounding areas
have also been immensely improved because of it.
Councilmember Lieberman commented that he believed that the $3,411,000 might not
be sufficient for the following years. He said that they need to start putting away funds
should they move forward with this bid. He stated that he was concerned with the
amount and source of money needed to move forward.
Vice Mayor Martinez also had concerns as to how funds will be generated. Ms.
Churchard stated that they would be looking at opportunities for specific events to
generate funds. Vice Mayor Martinez asked if possibly the NFL could help offset some
of the cost.
Mayor Scruggs discussed the cost associated with the bowl games and how some cost
cannot be controlled. She also questioned the amounts given to proceed forward with
this bid. She questioned the amount of$3,411,000 needed, when only $1,887,000 was
used for the Fiesta Bowl and BCS games. She reiterated that the $7 Million raised was
for different discretionary items and not only for bowl game expenses. She added that
these events do bring opportunities to the city; however there are expenses that have to
be met.
Ms. Churchard explained that the reason for the request for a larger fund amount was
because of the longer time frame needed for the NFL, fire, police, Homeland Security
and federal agencies to make arrangements for the tremendous effort leading up to the
Super Bowl. She presented a cost break down estimate for the agencies involved.
Mayor Scruggs suggested possibly asking the federal agencies for funding support.
Councilmember Lieberman asked where the funds to pay for the 2008 Fiesta Bowl
would come from. Ms. Churchard stated that it would be part of the budget-moving
forward not part of the National Events Funds. Mr. Beasley stated that they have a
budget set aside for recurring games not reflected in the National Event Fund.
Councilmember Clark voiced her concerns with the City of Glendale incurring most of
the cost for these games. She stated that the Fiesta and BCS games came with
reimbursements from contributors, which were a great financial support. She would like
to see other cities and entities come forward and contribute funds to help offset the cost
since they too benefit from these events.
Councilmember Lieberman agreed with Councilmember Clark. He stated that he would
like to see additional support come from the Host Committee and the NFL.
Mr. Beasley stated that this process was based on a competition between cities to host
this event. He said he does not expect the NFL to lower its standards and they are
typically non-negotiable. He added that they need to consider that those who put more
on the table in a competition are the ones that are going to be successful in winning the
bid. He noted that they need to take that into consideration when presenting their bid.
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Ms. Churchard stated as a side note that the Host Committee has work extremely hard
to raise $15 Million for Super Bowl 2008.
Mayor Scruggs inquired as to what would happen if everyone should vote to move
forward with a bid and the city does not. Mr. Kennedy stated that they would simply not
submit the bid. He stated that he still believes this is a great opportunity for the City of
Glendale. He said that the bid process was put in place by the NFL and it is the way
they do business because this was a very coveted asset.
Mr. Kennedy stated that in response to Councilmember Clark's appeal for funding
support, the $15 Million the Host Committee raises would benefit Glendale directly. He
stated that the Host Committee would also be responsible for game day expenses,
which typically go to the stadium authority and the city in the amount of $1 Million for
funding. He reiterated the tremendous opportunity Glendale would pass up if they
decided not to move forward with a bid. He stated that the price to pay was minuscule
compared to the benefits. He asked the Council to seriously consider the opportunities
and make a decision.
Vice Mayor Martinez stated that he had expressed concerns with the costs but is willing
to move forward.
Councilmember Knaack stated that she had already put some thought into it and had
made the decision to move forward with the bid.
Councilmember Goulet stated that this event was a status symbol and the mega event
of the world. He said that people would remember and refer to it for a long time. He
added that they would be able to have discussions with companies and individuals that
would never have come but for this event. He said he is willing to move forward with
the bid.
Councilmember Frate stated that this was a coveted event and he was willing to move
forward. He stated that Glendale has already set a benchmark and needs to live up to
it. He said that they may not win the bid but should demonstrate that Glendale is
serious about hosting the Super Bowl in 2011.
Mr. Kennedy stated that they will have a budget of about $1 Million to host a program
for CEOs from around the world and will showcase Arizona including Glendale during
the course of Super Bowl week.
Councilmember Lieberman stated that he had no objection to hosting another Super
Bowl; however, he would like to know the cost associated with the Super Bowl being
held in 2008 first. He also asked for a break down on the Host Committee's $15 Million
fund.
Mayor Scruggs stated that many people would like to see actual numbers on profit
returns from these events, unfortunately there are no tangible numbers. She said that
she still believes that these events bring many different opportunities to the city. She
explained that Glendale has already positioned itself as a first rate city and will proceed
accordingly. She stated that hosting the Super Bowl was seen as the ultimate coveted
event and Glendale was in a position to host it. She stated that she supports the
resolutions to be brought forward on March 27, 2007.
Mr. Kennedy stated the Host Committee is committed to sharing the financial
responsibility for hosting mega events such as the Super Bowl.
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Mayor Scruggs stated that as of yet, there had not been an agreed upon approach in
supporting legislation to fund the cost of mega events but she knows it is under review.
2. FY 2006-07 SECOND QUARTER GENERAL FUND STATUS REPORT ON
REVENUES AND EXPENDITURES AND GENERAL FUND REVENUE
PROJECTION FOR FY 2007-08
CITY STAFF PRESENTING THIS ITEM: Mr. Art Lynch, Deputy City Manager; Mr. Ray
Shuey, Chief Financial Officer/Finance Director; Ms. Sherry Schurhammer, Budget and
Management Director
This is a request for the City Council to review the Fiscal Year (FY) 2006-07 second
quarter report on General Fund (GF) revenue and expenditures, as well as the FY
2007-08 GF revenue projection.
The FY 2006-07 GF second quarter reports and the FY 2007-08 GF revenue
projections is consistent with the Council's goal of ensuring the city's financial stability
by conducting timely reviews of expenditures and revenues.
In response to Council requests, staff committed to providing quarterly reports on the
GF beginning with FY 2003-04.
The GF revenue projection for the upcoming FY has been presented with the second
quarter report on the GF since 2004.
Second Quarter General Fund
The GF's second quarter revenue budget and actuals, as well as a comparison with
the second quarter of last FY, are as follows (in 000s):
FY 2006-07 FY 2006-07 FY 2006-07 FY 2005-06 % Change
Annual 2nd Qtr 2nd Qtr 2nd Qtr FY 2005-06 to
Budget Budget Actuals Actuals FY 2006-07
City Sales $62,172 $ 31,086 $ 32,776 $ 29,349 + 12%
Tax
State $24,961 $ 12,481 $ 13,762 $ 11,455 + 20%
Income Tax
State Sales $21,919 $ 10,959 $ 11,074 $ 11,039
Tax
State MV $10,209 $ 5,105 $ 4,998 $ 5,098 (2%)
In-Lieu
HURF $15,838 $ 7,919 $ 8,257 $ 8,046 + 3%
Primary $3,784 $ 1,892 $ 2,001 $ 1,969 + 2%
Prop Tax
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All $29,316 $ 14,658 $ 15,586 $ 14,743 + 6%
Other
TOTAL $168,199 $ 84,100 $ 88,454 $ 81,699 + 8%
The current FY's second quarter revenues are $ 6.7 Million (8%) more than last FY's
second quarter revenues.
The current FY's second quarter GF revenue receipts are $4.3 Million (5%) more than
budgeted.
City sales tax collections were almost $32.8 Million. This amount is approximately $1.7
Million (5%) more than budget. The $32.8 Million is $3.4 Million (12%) more than
second quarter receipts in FY 2005-06.
State-shared revenue collections were $29.8 Million. This amount is approximately
$1.3 Million (4.5%) more than budgeted. The three components of state-shared
revenue are shown below:
o State income tax receipts were $1.3 Million (10%) more than expected;
o State sales tax receipts were $115,000 (1%) more than expected; and
o Motor vehicle in-lieu receipts were $107,000 (2%) less than expected.
State-shared revenue receipts of almost $29.8 Million are $2.2 Million (8%) ahead of
the $27.6 Million collected in the second quarter of FY 2005-06.
HURF revenues are commonly called the gas tax, even though there are several other
transportation-related fees that comprise this revenue source. Much of this revenue
source is based on the volume of fuel sold rather than the price of fuel. HURF receipts
were $338,000 (4%) ahead of budget.
The FY 2006-07 second quarter budget expenditures and actual for the GF operating
and pay-as-you-go (PAYGO) capital expenditures are as follows (in 000s):
FY 2006-07 FY 2006-07 FY 2006-07 Amount
Annual 2nd Qtr 2nd Qtr Under/(Over)
Budget Budget Actuals Budget
GF $113,044 $ 56,522 $ 52,726 $3,796
Salaries/Benefits
GF Non- $61,074 $ 30,537 $ 30,226 $311
Personnel
GF Debt Service $9,764 $ 8,382 $ 8,212 $170
(leases)
PAYGO Capital $9,107 $ 4,553 $ 3,299 $1,254
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TOTAL $192,989 $ 99,994 $ 94,463 $5,531
Overall, second quarter actual were $5.5 Million less than the amount budgeted.
Salary savings totaled almost $3.8 Million and non-salary savings totaled $311,000.
The actual figure in the debt service category reflects the planned, budgeted one-time
$7 Million payment for the Northern Crossing lease that occurred in the first quarter.
The $7 Million payment was discussed with the Council during the April 11, 2006
Workshop on the FY 2006-07 budget.
At the end of the second quarter of FY 2006-07, the budget-basis GF fund balance
was just over $51 Million, as illustrated below:
Beginning Fund Balance $62,415
Revenues $88,454
Expenses ($94,463)
Transfers Out ($ 4,900)
Fund Balance $51,506
Designated — National Events Fund ($ 500)
Remaining Fund Balance $51,006
Second Quarter Designated Sales Tax Receipts
At the end of the second quarter, the transportation sales tax budget to actuals
comparison, as well as last FY's second quarter actuals, are the following:
FY 2006- FY 2006-07 FY 2006-07 FY 2005- % Change
07 Annual 2nd Qtr 2nd Qtr 06 FY 2005-06 to
Budget Budget Actuals 2"d Qtr FY 2006-07
Actuals
Transportation $23,475 $11,737 $12,987 $11,343 15 %
Sales Tax
The current FY's second quarter revenues are $1.6 Million (15%) more than last FY's
second quarter revenues.
The current FY's second quarter revenues are $1.2 Million (11%) more than the
second quarter budget.
At the end of the second quarter, the public safety sales tax receipts were the following
(in 000s):
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FY 2006-07 FY 2006-07 FY 2006-07 FY 2005-06 % Change
Annual 2nd Qtr 2nd Qtr 2nd Qtr FY 2005-06 to
Budget Budget Actuals Actuals FY 2006-07
Police sales tax $3,123 $ 1,561 $1,733 $1,499 15%
Fire sales tax $1,561 $ 780 $866 $750 15%
The current FY's second quarter police sales tax revenues are $234,000 (15%) more
than last FY's second quarter revenues.
The current FY's second quarter fire sales tax revenues are $116,000 (15%) more than
last FY's second quarter revenues.
For the current FY, the police component of the public safety sales tax was $172,000
(11%) ahead of budget.
For the current FY, the fire component of the public safety sales tax was $86,000
(11%) ahead of budget.
These receipts are not included in the GF city sales tax figure provided in the prior
section of this report.
FY 2007-08 General Fund Revenue Projection
The economy continues to grow robustly, as reflected in the fact that the city's GF
revenue collections through the first six months of the current FY are $6.7 Million (8%)
ahead of last FY's receipts through the second quarter.
The consensus among experts on the Arizona economy is that vibrant and strong
growth will continue for the remainder of this year and next year. This expected growth
is fueled by continued increases in population growth and job creation, and
complemented by healthy gains in personal income.
o According to Elliot Pollack, a recognized expert on the Arizona economy,
Arizona was second in the country for job growth in 2005 and 2006. For
population growth, Arizona was second in 2005 and first in 2006. These
trends are expected to continue for the foreseeable future.
o According to Marshall Vest, another recognized expert on the Arizona
economy, personal income in the Phoenix metropolitan area grew 8.9% in
2005 and 10.4% in 2006.
o Growth in personal income for the Phoenix metro area is estimated to be
between 6.8% - 7.4% for 2007 and 6.6% in 2008 according to a range of
experts on the Arizona economy.
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The GF ongoing revenue projection for FY 2007-08 is $186.1 Million. This projection is
fiscally prudent and reasonable because it is based on past collections experience for
the local and state economy for this year and expectations for next year.
The following table reflects Glendale's ongoing GF revenue actual since FY 2001-02,
as well as the estimate for this FY and the projection for next FY.
Fiscal Ongoing Actuals % Change From
Year (lx revenues excluded) Prior FY
2001-02 $116.5M
2002-03 $122.2M 4.9%
2003-04 $138.1M 13%
2004-05 $146.5M 6.1%
2005-06 $166.5M 13.6%
2006-07 estimate $173.7M 4.3% (estimate)
2007-08 projection $186.1M 7.1% increase from
FY 2006-07
estimate
The average annual growth rate was 9.4% between FY 2001-02 and FY 2005-06. This
robust average annual growth rate is the result of very strong growth in city sales tax
receipts and more moderate growth in state-shared revenue receipts.
Once we include next FY's projection, there is expected to be an almost $70 Million, or
60%, increase in GF ongoing revenue since the end of FY 2001-02.
This overall growth in GF ongoing revenues is significant because it means the city can
support and maintain quality ongoing city services, as directed by the Council, which
contribute to a high-quality of life for the Glendale community.
The two major sources of revenue for the GF are city sales tax receipts and state-
shared revenues. The sources have comprised between two-thirds and three-fourths
of the GF ongoing revenue since FY 2001-02 and are expected to continue to do so for
FY 2007-08.
The following table shows Glendale's city sales tax actual since FY 2001-02, as well as
the estimate for this FY and the projection for next FY.
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Fiscal City Sales Tax % Change From
Year Revenues Prior FY
2001-02 $41.4M
2002-03 $43.5M 5.1%
2003-04 $49.8M 14.5%
2004-05 $52.5M 5.4%
2005-06 $59.7M 13.7%
2006-07 estimate $63.6M 6.5% (estimate)
2007-08 projection $67.5M 6.1% increase from
FY 2006-07 estimate
The average annual growth rate for city sales tax collections was 9.7% between FY
2001-02 and FY 2005-06.
Once the FY08 projection is included, there is expected to be a $26 Million, or 63%,
increase in city sales tax revenue since the end of FY 2001-02. As Glendale continues
to grow its sports, entertainment, and retail destination point for Arizona and points
beyond, this revenue source should continue to experience healthy growth.
The expected growth for FY 2007-08 is in line with the forecasts of retail sales growth
in the 5% - 7% range that Arizona economy experts have projected.
The following table shows Glendale's state-shared revenue actual since FY 2001-02,
as well as the estimate for this FY and the projection for next FY.
Fiscal State-Shared % Change From
Year Revenue Actual Prior FY
2001-02 $46.9M
2002-03 $49.0M 4.5%
2003-04 $47.0M (4.1%)
2004-05 $49.7M 5.7%
2005-06 $56.6M 13.9%
2006-07 estimate $61.1M 7.9% (estimate)
2007-08 projection $69.6M 13.9% increase from
FY 2006-07 estimate
The average annual growth rate for city sales tax collections was 5% between FY
2001-02andFY2005-06.
Once the FY08 projection is included, there is expected to be an almost $23 Million, or
48%, increase in state-shared tax revenue since the end of FY 2001-02.
State-shared revenue is comprised of three sources: state income tax, state sales tax,
and motor vehicle in-lieu tax.
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The most significant component of state-shared revenue is income tax. This revenue
source is primarily driven by personal income growth. Income tax revenue lags by two
years so the state income tax receipts for FY 2007-08 will reflect the personal income
growth experienced in 2006. As noted previously in this communication, personal
income in the Phoenix metropolitan area grew 8.9% in 2005 and 10.4% in 2006 and is
estimated to be between 6.8% - 7.4% for 2007 and 6.6% in 2008.
Glendale's share of state income tax revenue is expected to increase 24%, from $27.5
Million in the current FY to $34.1 Million next FY. This sizable increase is expected
because the state's net income tax collection in 2006 grew 28.5%, from $3.5 billion in
2005 to $4.5 billion in 2006.
State sales tax collections are expected to increase about 6% next FY, consistent with
the increase expected for city sales tax receipts.
Motor vehicle in lieu collections are expected to increase a more modest 4% given that
vehicle sales have slowed somewhat now that dealer incentives are less lucrative and
gas prices have remained at an elevated level for an extended period of time.
The FY 2005-06 second quarter report on the GF and FY 2006-07 GF revenue
projections were presented to the Council on March 14, 2006.
The FY 2005-06 third quarter report on the GF was presented to the Council on June
20, 2006.
The FY 2005-06 fourth quarter report on the GF was presented to the Council on
November 21, 2006.
The FY 2005-06 first quarter report on the GF was presented to the Council on
December 20, 2005.
This is a status report on the General Fund covering the first two quarters of FY 2006-
07, as well as the General Fund revenue projection for FY 2007-08. No Council
guidance is requested on this report.
Mr. Lynch began the presentation by saying the second quarter report covers the period
of July thru December 2006. He noted that this report is consistent with second quarter
reports presented in prior fiscal years in that ongoing expenditures are below budget
and ongoing revenues are ahead of budget.
Ms. Schurhammer explained the second quarter revenue slide by summarizing the
bottom line information as coming in $4.3M or 5% ahead of budget. When compared to
the same time period last fiscal year, revenue has grown 8% or $6.7M. She said the
two main components of revenue growth are city sales tax and state-shared revenue,
which grew 12% and 8% respectively. Overall, the vibrant growth pattern experienced
in prior fiscal year is continuing.
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Mr. Shuey addressed the information in the General Fund fund balance slide. He noted
that expenditures came in below budget while revenues came in ahead of budget,
resulting in some growth in the General Fund fund balance since the end of the first
quarter. He concluded by saying the results are consistent with Council's policy
direction to be fiscally sound as the city continues to follow prudent financial
management practices as well as provide a cushion for flexibility to address future
needs.
Mayor Scruggs asked a question concerning the General Fund salaries and benefit
information in the council communication. She asked why it was $3.8M below budget.
Ms. Sherry Schurhammer said the difference is attributable to the time it takes to fill
vacancies. Positions are budgeted for a full fiscal, yet some positions might be vacant
for part of the year due to retirement or promotion. She said the amount of salary
savings that accumulates by the end of the fiscal year would vary from year to year.
Mayor Scruggs asked if the salary savings is applied to the next year's budget. Ms.
Schurhammer said yes, noting that the savings, which are one time in nature, are used
to fund one-time expenditures in the next fiscal year.
Mayor Scruggs asked how the salary budget is established. Ms. Schurhammer said a
salary forecast model based on actual salaries for filled positions is used. Vacant
positions are usually budgeted at the mid-point of a salary range although there are
some exceptions.
Mayor Scruggs suggested passing on the savings to the Police Department for
personnel, salaries and benefits instead of using it for one-time expenditures. Ms.
Schurhammer stated that the savings are one time in nature and therefore should not
be allocated for ongoing costs such as salaries and benefits. Vice Mayor Martinez
agreed with Mayor Scruggs on setting aside the money for the Police Department.
Mayor Scruggs suggested a discussion on this matter at a later date might be needed.
3. 2007 STATE AND FEDERAL LEGISLATIVE UPDATE AND REGIONAL
OFFICE CENTER PRESENTATION
CITY STAFF PRESENTING THIS ITEM: Ms. Dana Tranberg, Intergovernmental
Programs Director; Ms. Jessica Blazina, Deputy Intergovernmental Programs Director;
Mr. Brent Stoddard, Legislative Coordinator
This is a request for the City Council to provide direction on proposed state legislation,
consistent with the approved 2007 state legislative agenda; provide an update on the
2007 federal legislative agenda; and provide direction on a proposed regional office
center for the three regional transportation agencies, Maricopa Association of
Governments, Valley Metro/Regional Public Transit Authority and Metro Rail.
The purpose of the federal and state legislative agendas is to affect federal and state
legislation and regulations as they relate to the interests of the city and its residents.
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The 2007 state and federal legislative agendas provide the policy framework by which
Intergovernmental Programs staff engages on state and federal legislative issues.
Throughout the 2007 legislative sessions, policy direction will be sought on proposed
statutory changes which fall under the adopted council policy statements relating to the
financial stability of the city, public safety issues, promoting economic development,
managing growth and preserving neighborhoods.
Leaislative Update
The Intergovernmental Programs staff recommends prioritizing the state legislative
agenda to a few key issues to allow the city to have a stronger, more consistent
message on the items of greatest priority. The proposed key priority issues for
consideration are described in the reports that were provided with the council
communication.
The legislative agenda defines the city's priorities for the upcoming session and will
guide the city's lobbying activities at the Arizona State Legislature. The
Intergovernmental Programs staff will come before the Council on a regular basis
throughout the session for direction on bills and amendments that may be introduced.
The city's legislative agenda is a flexible document and may change, based on activities
at the Legislature and Council direction.
The Intergovernmental Programs Department has conducted a citywide assessment of
potential federal funding opportunities to be included in the 2007 federal legislative
agenda. Based on this assessment, staff recommends pursuing federal funding
opportunities, including grant opportunities, line-item appropriations, earmarks and
regulation revisions in the areas of: transportation, public safety, homeland security,
historic preservation, libraries, youth workforce development and economic
development initiative projects.
The Intergovernmental Programs Department returned at the February 20, 2007
workshop to present the comprehensive 2007 federal legislative agenda, inclusive of
funding requests and policy areas for engagement.
Regional Office Center
The City of Glendale is a member of three regional agencies who currently lease office
space in downtown Phoenix: Maricopa Association of Governments (MAG), Valley
Metro, and Metro Rail. The leases for these agencies are going to expire over the next
several years and the agencies will face increased lease rates based on the current
market. In addition, the agencies are facing growth needs beyond their current space.
MAG has been holding a "Building Lease Working Group" over the last two years to
consider alternative options to leasing and has recommended building a new Regional
Office Center to allow all three regional agencies to be in a central location together.
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On March 5, 2007, MAG held a workshop session for member agencies to review the
detailed financial analysis of the proposed building.
At the March Board meetings of each of the three participating regional agencies, the
Glendale representative will be asked if they support entering into a Memorandum of
Understanding (MOU) for the Regional Office Center with the Phoenix Industrial
Development Authority and the Regional Office Center LLC; and to execute a lease for
30 years for the Regional Office Center.
Leaislative Uodate
On December 19, 2006, the Council approved the 2007 State Legislative Agenda,
which included policy statements on municipal legislative priorities and principles.
On January 16, 2007, the Intergovernmental Programs staff presented legislative
issues to the Council.
On January 30, 2007, the Intergovernmental Programs staff presented state legislative
and federal issues to the Council.
On February 20, 2007, the Intergovernmental Programs staff presented state legislative
issues and the 2007 federal legislative agenda to the Council.
On March 6, 2007, the Intergovernmental Programs staff presented state legislative
issues and a federal legislative update to the Council.
Reaional Office Center
This is the first update to the Council on this item.
The priorities and principles of Glendale's 2007 state legislative agenda provide the
venue for the city to identify and engage on state legislative issues. The key principles
of the state legislative agenda are to preserve and enhance the city's ability to deliver
quality and cost-effective services to citizens and visitors; to address quality of life
issues for Glendale residents, and to enhance the City Council's ability to serve the
community by retaining local decision making authority and maintain state legislative
and voter commitments for revenue sources.
Development of a 2007 federal legislative agenda provides the venue for the city to
identify and engage on federal issues of concern to the community, which will enhance
the ability of the city to deliver superior services and to address quality of life issues for
the residents of Glendale.
Staff is requesting the Council to provide policy direction on the proposed state
legislative issues and federal legislative program development. Staff is also requesting
the Council to provide policy direction on the proposed Regional Office Center (ROC).
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Ms. Dana Tranberg, Intergovernmental Programs Director, presented a summary on
Senate Bill 1604. The bill would reimburse public agencies for the public safety
expenses associated with hosting a major public event. She said that the
reimbursement would be only for public safety cost and requires the definition of eligible
events, which meet the criteria to remain very narrowly crafted. Staff recommends
support of this bill,
Ms. Jessica Blazina, Deputy Intergovernmental Programs Director, presented a
summery on the two strikes everything amendments that addressed municipal retail tax
incentives. Senate Bill 1350 and House Bill 1215 are scheduled for committee hearings
tomorrow. She stated that these bills were identical to the 2006 bills in which they were
directed to oppose. These bills are limited in scope and only apply to retail sales and
only apply to Maricopa County. Mayor Scruggs and Council stated that they were not in
support of these bills.
Ms. Blazina presented a summery on Senate Bill 2369, which was the temporary
signage bill. She stated that this bill requires all municipalities to allow sign walkers and
implement a maximum fee of $25.00 for a permit to post displays or use sign walkers.
The fees would fund beatification of the city. Staff recommends not supporting this bill.
Mr. Brent Stoddard, Legislative Coordinator presented an update on Senate Bill 1555.
He stated that the bill had been amended since first discussed. The amended bill now
prohibits only a level three-sex offender who has been convicted of a dangerous crime
against children. The sex offender is required to register and not to reside within 700
feet of a private or public primary or secondary school and childcare facility. The
previous bill stated it to be 1500 feet away from these facilities.
The bill continues to grandfather in those persons who currently reside within the
boundaries or for whom a new school might be built. In addition, it now exempts
individuals who are on probationary status, have had their civil rights restored or who
have been out of prison and not committed any subsequent offences for the past ten
years. He added that staff was concerned with a floor amendment that would prohibit
Cities to pass more restrictive local ordinances than in the bill. Staff recommends
continuing to support this bill in its current form, however opposes any attempts to pass
more restrictive measures prohibiting Cities from passing additional restrictive
measures.
Mayor Scruggs had concerns with the amendments made to this bill. Ms. Tranberg
stated that in legislation there were always compromises. She anticipates additional
amendments to this bill in the future.
Vice Mayor Martinez stated that he supports this bill even if he had concerns with the
new amendments being issued. He noted that this bill is better than not having one at
all.
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Mr. Stoddard presented an update on Senate Bill 1360. This bill would remove an
HOA's authority to regulate parking on a publicly owned street, regardless of the
existing code, covenant or restrictions in regards to parking in the community. Staff
communicated this bill to Council for information purposes only.
Mayor Scruggs asked if the State Legislators had the right to void contracts by private
citizens. Mr. Stoddard stated that they had a right under certain conditions such as
safety. He noted that he anticipated a lengthy discussion on this issue. Mayor Scruggs
stated that she opposes this bill in part because they are imposing on people's rights.
Councilmember Lieberman stated that he agreed with Mayor Scruggs.
Councilmember Clark commented that if the HOA's do not restrict public parking, then
the responsibility would fall to the city. She said it could possibly create an unfunded
mandate on the city. She stated she does not support this bill.
Vice Mayor Martinez stated his opposition of this bill. He said that this was also a
safety issue.
Councilmember Frate stated that this seemed like a public safety issue because as of
now, police officers were able to go into neighborhoods that don't have vehicles parked
on the streets and be able to easily spot a suspicious vehicle. He does not support this
bill.
Mr. Stoddard presented an update on the Regional Office Center. The City of Glendale
is a member of three regional agencies who currently lease office space in downtown
Phoenix and would be occupying the new center at the end of their leases. They are
the Maricopa Association of Governments (MAG), Valley Metro, and Metro Rail. The
Arizona Municipal Water Users Association board has voted not to be a part of this
regional office center. He stated that the total estimated cost of the building was $86.9
Million over thirty years. Each of the three agencies has identified the funds they will
use to cover their portion of financing the building. He stated that the building would be
located on the corner of 1st Avenue and West McKinley on approximately 1.56 acres of
land. The building would be ready to move into by October or November of 2009.
Vice Mayor Martinez stated his support. He noted that the City of Glendale would not
incur any debt in regards to this venture.
Councilmember Clark stated her support and appreciates everyone's efforts on this
item.
Councilmember Lieberman also stated his support on this item.
Councilmember Frate asked how many stories would the building have. Mr. Stroddard
stated that it would have 11 stories.
Mayor Scruggs stated her support on this item.
ADJOURNMENT
The meeting was adjourned at 4:15 p.m.
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