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Wow the thieves on the Glendale City Council are out of touch with reality!!!
Most government crooks are smart enough not to steal so much that they bankrupt the government entity they work for. It doesn't appear that the thieves on the Glendale city council are that bright. Glendale weighs option to cover sports-related debts 2 buildings would yield $41 million loan by Lisa Halverstadt - Jun. 23, 2012 08:00 AM The Republic | azcentral.com Glendale officials this week considered offering up City Hall and the main police station as collateral to obtain a $41 million loan to cover sports-related debts. The city would use the money to cover payments to the National Hockey League and potentially to make payments on Camelback Ranch stadium, the city's spring-training ballpark. Glendale officials acknowledged the proposal wouldn't bring the city any savings. "This is by no means a money-saving exercise," Interim City Manager Horatio Skeete said. "This exercise would basically allow us the freedom to do a couple things: spread the payments of the $25 million that is currently owed to the NHL and to shore up ourselves for the (Camelback Ranch payments) that are coming due." The City Council on Tuesday decided there were too many unknowns for staffers to proceed with the plan now. Those variables include whether two referendums will make it to the November ballot.One ballot measure aims to repeal a proposed sales-tax hike the city approved earlier this month to generate an estimated $24 million. The other aims to repeal the city's deal with a likely Phoenix Coyotes buyer. Separate groups of residents have said they are collecting signatures for the referendums, but each would need 1,862 by early July. Both ballot measures would have a direct financial impact on the city. Glendale shored up an anticipated $35 million shortfall in its operating budget for the coming fiscal year, which opens July 1, in part with the sales-tax hike. The city's fiscal turmoil in part relates to the Coyotes deal. The deal, which will cost the city $324 million over 20 years, came after more than three years searching for a team owner. A council majority argues that keeping the hockey team would best serve the city financially in the long term. In the near term, it places a heavy burden on the city's general-operating fund. The deal has the city paying the potential team buyer $17 million in the coming fiscal year to manage the city-owned Jobing.com Arena. The fee would range between $10 million and $20 million annually over the life of the lease. Scruggs on Tuesday said she wasn't ready to support staffers' proposal for the loan because the referendums could dramatically change the city's landscape. "With everything that's in flux right now, we need to a holistic approach to a huge problem, and we don't even know what the size of the problem is and we won't know until July 5," said Scruggs, referring to the referendum efforts. "I think that's the date signatures have to be in." Councilwoman Yvonne Knaack agreed. "This is an opportunity that will be available to us a month from now," Knaack said. Skeete acknowledged the possible referendum and the lack of finality in the Coyotes sale could create questions for banks interested in working with Glendale. As another option, the city may be able to work out a payment plan with the NHL, he said. The loan, with an expected 3 to 5 percent interest rate, would have cost the city an average of $4.5 million annually for 10 years, Glendale Chief Financial Officer Diane Goke said. The benefit is that it would give the city immediate cash to pay off the NHL instead of raiding the city's utility fund. The city could use the money to pay the NHL $25 million the city promised the league to manage the team and arena this year. It was the second year for such a pledge. For now, Glendale plans to get most of this year's pledge from its water and sewer fund with a smaller portion from the general fund, which covers day-to-day operating expenses. Last year's pledge was paid from utility funds as well. The loan also would provide cash for the city to make payments on its spring-training facility. The city borrowed $200 million for the ballpark that opened in 2009. About $50 million of that was set aside to make the initial debt payments until commercial development sprouted and generated revenue for the city. The planned shops, restaurants and other projects vanished in the recession and the city's $50 million reserve is nearly gone. The city will face a $13 million debt payment in the 2013-14 budget year with no reserve to cover it. Joyce Clark was the most outspoken council member to support moving forward with the loan. "I say waiting to see what's going to happen is like burying your head in the sand," she said. "I say we should be aggressive." Glendale faces unknown Some business leaders have said they plan to gather signatures in hopes of overturning Glendale's approval of a 0.7 percent temporary sales tax hike. Two Glendale residents plan to attempt a referendum on the Phoenix Coyotes deal that the Glendale City Council approved earlier this month. Glendale is awaiting a Maricopa County Superior Court judge's ruling on whether the 4-2 council vote on the Coyotes deal should be invalidated based on concerns raised by the Goldwater Institute. The NHL has yet to announce the Coyotes have been sold to former San Jose Sharks chief executive Greg Jamison, whom the city has agreed to pay $10 million to $20 million annually over 20 years to operate the city-owned Jobing.com Arena. |