By Henry Twombly, Sedona Resident
(June 6, 2017)
The second possible bond will arise from the same miasma of fiscal mismanagement and political clout, wherein the policies and their implementation are funded by taxpayer monies but profit only the Three Wizards – the tourist, real estate/developers, and construction industries – resulting in a diminished quality of life for us residents.
The second GO bond will come from the City, generated by the city staffs (and Wizards) and approved by the Council. If not in the form of a GO bond, then in the form of a property tax, both of which would have to be approved by resident voters. Yet some of us are already paying an indirect property tax. The residents in Fairfield and Summit II Community Facilities Districts (CFRs) pay assessments for the improvement of the roads within each district. But for nearly a decade those funds have been diverted by the City to purchase the Brewer Ranger station and pay for more parks, though the City may now have rescinded this diversion and are now once again using these funds as originally intended.
The 60% of us residents who are hooked up to the City’s sewer system are paying ever increasing wastewater (WW) fees. Some are paying fees, even though they don’t have a house; but they own the land that’s mandated to be hooked up to the system should they decide to build. What’s more egregious is the City has now characterized the WW Fund as an “enterprise fund,” and it’s reneging on it original promise to residents to subsidize the fund. Initially the state went after uptown businesses for polluting Oak Creek. Instead of building a small onsite plant funded by the corporate polluters, the Wizards convinced the City to build a huge plant miles away and make residents hook up; so our fees would help defray the costs of plant construction and maintenance. The only way the City garnered residents’ support for this project was its promise to use some sales taxes to subsidize these costs by 40-45%. Over the past decade or so the City has chipped away at these subsidies, while they continued to increase our fees. Hoag’s 2014 WW Fund study decreased the subsidies from 35% to 30%. It also levied a one-time fee increase on single family residences (10%), multi-family homes (17%), restaurants (27%), hotels and resorts (only 6.4%) and other commercial accounts (23%). On top of these one-time fees the Council instituted the recommended 4% annual increase for 4 years (through 2018). In the current budget the City falsely claims that the report suggested the 4% annual increase go through 2021 and then a decrease to 3% for the next 2 years (through 2023). So they’re trying to justify these latter increases through this report. More smoke and mirrors, mainly because they are reducing the subsidy percentage to 25% and want to use the extra $4.05m plus for other things. Eventually they want to reduce the subsidies to zero and have residents pay the total cost of the WW plant – which is the true meaning of “enterprise fund.” Moreover according to the proposed budget, “While annualized visitor population represents 55% of the total annualized population, the visitors contribute less than 25% of the funding for the operations of the wastewater system. Even considering the all funding sources in total, the annualized visitor population only contributes 40%.” The long and the short of it is that the City is reneging on its promise of subsidies, discriminating against and sticking 60% of us residents with all the WW costs, so it can use these funds for the Chamber’s product development and other Wizard-generated endeavors.
The City is not even using these fund to balance their budget. When we residents voted for Home Rule in 2014, we approved a 2017-18 budget with total expenditures of $32.472m plus. But the Council is now proposing a budget of $47,752,118, a 47% increase. The trouble with Home Rule is that it gives the Council a blank check and provides no checks or limitations on their profligate spending, so that voter-approved budget estimates are meaningless. Moreover this $47m budget is a $10.06m (24%) increase over last year’s (2016-17) adopted budget of $38. 361m plus. The 2016-17 actual expenditures were $34,827,975, while actual revenues were only $31,183,461, meaning the budget was nearly $3.3m in the red. But the Council would claim the budget was balanced because they used reserve funds to cover the shortfall. This modus operandi for “balancing” the budget has been employed (as “in ploy”) for several years in a row, so now the reserve funds are getting dangerously low. Yet the mayor in her SSRN article (5/24/17) writes, “While it may appear that we are spending more than we took in during the year, in fact the capital items were funded from previous operating surpluses.” She concludes the smoke-and-mirrors article by saying, “We never spend more money than we take in.” From the SRRN article “City looks at $47m budget (5/19/17), “As he did during the budget hearings, Councilman John Currivan argued that the city does not have a balanced budget and nor should it tout itself as having one. ‘We didn’t pass a balanced budget in [fiscal year] ’17 because we budgeted to spend more than we were budgeting to take in,’ he said.” The City manager’s response was a specious argument that the City adhered to what had to be a convoluted “legal definition” of a balanced budget according to state statutes. (Boy, I wish I could balance my checkbook the way the City balances its budget.) From that article we also learn that reserve funds make up 21% of the budget; but we don’t learn how much is the discrepancy between revenues and spending. An oversight by SRRN. The amount is $9,989,641.
The trend of increasing budgets from the previous years (2.2% in 2015-16; 11% in 2016-17; and 24% in 2017-18) is more disturbing in light of…”That [$63,685,246] is the cost of the proposed road work over the next 10 years. But only $5 million of that is funded – everything beyond that is unfunded at this point (SRRN 5/517). In this article entitled “City roads to cost $63.6M,” the first two and only paragraphs address this topic, but they don’t identify “the projects coming out of the transportation master plan which is not yet complete.” Which implies there could be more projects with additional costs to the $63.6m. Well, we can deduce may of these projects will be from the list of options generated by the $250,000 traffic study. Unfortunately the only viable option in terms of costs and efficacy is a $10m bridge down at Red Rock Crossing, but they probably still will do some that tear up our neighborhoods; the latest detour being a $2.8m connection of streets that parallel 89A from Arroyo Pinon Dr. to Airport Rd., analogous to the Thunder Mtn-Sanborn Roads parallel on the north side. These detours would accomplish nothing but to congest and ravage our local neighborhoods, because all this traffic would still get dumped back onto 89A. All their options cost lots of money and save only a negligible amount of travel time. I don’t know if the Council has factored into the equation that the construction to implement any of these options would just cause more traffic congestion (except the one down at Red Rock Crossing). Moreover by the time these projects are completed over the next 10 years, the City’s rezoning to accommodate developers and expedite the Community Plan will only densify our population and increase traffic so much as to make these road improvements ineffective and obsolete. In short their attempt to mitigate traffic congestion will be a total waste of time and money, but a great windfall for the construction industry.
The rest of the aforementioned article was how the City’s exorbitant spending would be a further boon for the construction industry and begin to create more of a bureaucratic behemoth of city government. Two years ago the City purchased property at 55 Sinagua Dr. adjacent to City Hall for $850,000, which was $70,000 over the listed $780,000 price. (The driving force behind this purchase was a Council member (now a former one) whose spouse is a realtor.) A boon to the real estate Wizard. After already allocating funds to renovate and expand the police’s shooting range, the City now wants to spend $300,000 to renovate the Sinagua building, so the city court can relocate there and possibly the entire legal department. All this is so the police department can expand due to a lack of an interview room, storage area and some work stations. Furthermore “the City realizes that in 10 or 15 years a new police station [estimated at $8-9m] will be needed but for now”…they have “$20,000 earmarked for a study as to how the police department could best use an expansion of the current facility.”
Where is the City going to get all this money for roads and new buildings? “The city’s fiscal sustainability work group…will be coming to the Council this summer with recommendations on potential funding options.” Sounds like the SFD’s Citizens’ Advisory Committee, doesn’t it? From our asistant City manager, “More than likely the community is going to need to, at that point, look at these projects and say, ‘Do I want that? Do I want the city to do that? And if so, what am I willing to pay for?’” Read between the lines, and you can easily imagine voting on a GO bond or a property tax this year or next. The only way to stop the Wizards and out-of-hand spending by the City is to vote NO on Home Rule in 2018. And that’s not all with might be voting on in November 2018…
Three Possible Bonds: Part 1 • Part 2 • Part 3
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