The Sports Stadium Funding Mess


The recent NFL players’ misinformed protest, sitting for the National Anthem, has brought new focus to the out of control, tax free municipal bond government welfare for the rich giveaway that has been used in Goodyear and other localities to reward local campaign contributors at the expense of taxpayers.

Besides being a disaster for local government budgets, providing tax free municipal bonds to fund sports stadiums (like the more that $100 million that Goodyear has for it’s 30 day Cactus League season) are simply government welfare for billionaire owners, millionaire players, and the fat cat, high tax bracket individuals who buy the bonds and avoid paying ANY income tax on their earnings. (Aka, “campaign contributors”)

Is it any wonder that local politicians love these loser projects?

You don’t have to believe me. Even the left leaning Brookings Institution agrees with me.

“… there is little evidence that stadiums provide even local economic benefits. Decades of academic studies consistently find no discernible positive relationship between sports facilities and local economic development, income growth, or job creation. And local benefits aside, there is clearly no economic justification for federal subsidies for sports stadiums. Residents of, say, Wyoming, Maine, or Alaska have nothing to gain from the Washington-area football team’s decision to locate in Virginia, Maryland, or the District of Columbia.”

And here is Brookings’ entire report.

Brookings Inst report.

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Best Mayor Money Can Buy


In this year’s Mayoral election, Incumbent Mayor Georgia Lord received $33,860.00 from campaign contributors. Of this amount, $27,380.00 was contributed by developers, attorneys and two PAC’s. The Robson Communities owners personally contributed $12,000. Goodyear Forward, a separate third PAC, funded an additional $7000 for an ad that was paid for and authorized by them in support of Mayor Lord.
To access all campaign finance reports to date for this election please go to the link below:

http://www.goodyearaz.gov/government/departments-divisions-a-z/city-clerk-s-office/elections/active-political-committees/campaign-finance

Record Crowds at Goodyear Stadium


Don’t we wish?

It was a beautiful day, a Friday, already 7 days into the 33 day season, and there might have been 1,000 people in the $100 million dollar, GY stadium which costs GY tax payers $8 million dollars per year to operate. (TOTAL primary property taxes in GY are only about $7.5 mil per year.)

If you can’t fill it in the year that one of your clubs won the AL Championship and nearly the World Series what chance do you ever have to fill it up? 

Besides the two games per year when the Cubs play there in March.

This is what happens when you have people like Georgia Lord, who have never had a real job, or run a business, or even know the difference between depreciation and operating costs, run your city government.

Hi Ho Silver, Again…


Editor’s note. “Clayton Moore” aka “The Lone Ranger” is a concerned private citizen of Goodyear who, due to concerns about backlash, I have allowed to write posts anonymously. howardsgoodyearblog knows the identity of Clayton Moore and will protect their anonymity. We will also allow others to write anonymously under the same guidelines.

Here is Clayton’s latest article.

By Clayton Moore

The time has come for Goodyear citizens to step up to elect a slate of candidates that will represent them and not the special interests that fund the current administration. Mr. James Cavanaugh has offered a responsible alternative to the present irresponsibility. HIs alternatives are what he so accurately elucidates in his platform.

Taxes are out of control. With no explanation as to where that money is going. As Mr. Cavanaugh points out:

“…taxes have increased from $1.60 to $1.86 per hundred dollars of assessed real property value. Its sales tax increased from 2% to 2.5%.

Goodyear has a higher real property tax rate than most Valley cities and for every city in the East Valley. Community Facility Districts (CFD’s), directed by the City Government, exacerbate the problem for Goodyear residents. In many communities, greatly.
Tax savvy businesses and private citizens tend to adopt locations with lower rates.
When compared to the vast majority of cities within the State of Arizona, the amount of personal income that Goodyear government demands from its citizens is alarming.”
The median price for a home in Goodyear is $253,000.00 which results in a $657.8 increase in property tax. The median family household income in Goodyear is $ 75,654.00. If 60% of that is spent on taxable sales it results in a sales tax increase of $226.96. The annual increase in taxes for the average family in Goodyear is $884.76. What could you do with an extra $880.00 every year?

Utility cost have sky-rocketed beyond anything imaginable. Water and sewer utilities are designed to be Enterprise Funds. That means you pay what it cost to provide. The current administration has made is a slush fund that they use to glean revenue from your unsuspecting pockets. Mr Brodbeck eloquently explains in his recent blog:

(https://howardsgoodyearblog.com/2017/02/17/where-did-70-million-go/)

$70,000,000.00 was taken from Goodyear citizens and received nothing in return. While they would like you to believe that the utilities are indeed an enterprise fund, they have created a slush fund with which to garner huge amounts of money from you and not call it a tax. They then put that “extra” money in the general fund and use it buy votes and support from civil servants who’s loyalty you expect as citizens but finds its way to those providing gifts.

CFD’s are grossly absurd. It is a tax placed on home buyers to fund infrastructure in communities where the City and the developers decided they wanted to abdicate their responsibility to prove and pass the cost on to you. While that in itself is reprehensible but not the most wicked aspect. The developer passes his costs on to the home buyer with a profit. The City is already responsible for infrastructure and taxes you for it. So what is the purpose of the CFD? No one can realistically explain it. But what’s even more reprehensible is the financing of the CFD. Essentially, it is a $5000.00 loan given to the home buyer by the City (who has no authority to provide loans, they are not a bank) payable at 7.5% over a period of twenty years with a payment against the principle only once each year. What financial genius thought of that? Actually, for the City, it is brilliant. They are collecting huge amounts of interest on a very small amount. But remember, you are the one paying the interest. That twenty year amortization is going to cost you more than $10,000.00 before you are paid. And you are paying for something that you already paid for with taxes and the house purchase.

Follow the money trail. Who gets to benefit by expanding taxes for infrastructure and the like. Look who funded the incumbents in the past elections. Public service unions and property developers. The Robson organization donated tens of thousands of dollars to the Mayor. Guess who she favors when making City decisions. What does Robson get for all the donations? Anything they want!

The City’s management team has said they have to double your utility rates over the next five years to fund needed infrastructure. What did they do with the $70M they already took that wasn’t necessary for utilities? They have already doubled utility rates over the past five years. Now they want to double it again? Where does it stop? When we are paying $400.00 each month for water?

Let’s assume for a moment that the need for infrastructure improvements is real. Do we have to double rates? This is the decision of people that claim to be responsible and talented stewards of your money and City. Really? We could hire a bunch of high school students at minimum wage to say “We need more money, just raise taxes”. We need people making those decisions that can be creative, inspired and imaginative. Not people more worried about their next photo opportunity or newspaper interview.

Where is this money going? Is it building infrastructure? Encouraging business to move to Goodyear?

Apparently, it is going to enrich the lives of the people who serve us. Police and Fire Unions that supported the current administration have hit the lottery. Everyone in town hall gets a raise. That is not to say they are not deserving. But they are no more deserving than the people footing the bill. The Council and Mayor voted themselves a raise. All on the backs of the people still suffering through the slowly recovering recession and stagnant economy. Are these the people you want making financial decisions about your money? Or would you prefer someone that is a proven leader and fiscally responsible with the City coffers? Jim Cavanaugh is a successful businessman and retired military officer. The incumbents have never had a real job in their lives and have never had to make hard responsible decisions about their own financial well-being. That’s why they cannot make dependable decisions with your City or money.

Do any of you have a commute from Goodyear into Phoenix or the surrounding area? It is now a one and a half hour commute. The traffic is overwhelming. What is the response of all the incumbents in this year’s election. Could it be the same vision they’ve had for the past six to eight years. Their vision is get re-elected. They have no vision of care for the traffic or the taxes or anything else having to do with you. Mr. Cavanaugh has a vision to reduce your taxes, be fair with enterprise funds and to start a movement to do something about the commute.

What the City needs is change. Look at the incumbents and their accomplishments, or lack thereof. Then look at the accomplishments of Mr. Cavanaugh.

This is an excerpt from Mr. Cavanaugh’s website presenting only his military tributes; some of which are not easy to get. There are more:

Legion of Merit
Meritorious Service Medal w/5 devices
Air Force Commendation Medal w/1 device
Air Force Outstanding Unit Award w/2 devices
Combat Readiness Medal
Vietnam Service Medal
Small Arms Marksmanship Ribbon
Republic of Vietnam Gallantry Cross w/1 device
Vietnam Campaign Medal

Where can I find Ms. Lords military or any other accomplishments or tributes?

Mr. Cavanaugh delivers his vision for Goodyear and the future quite clearly. Visit his website at:

http://www.jimcavanaughformayor.com/

Where Did $70 Million Go?


In October of 2015 your Goodyear City Council voted to double your water and wastewater rates over the next 5 years.

Why?

Because they said they needed to spend about $50 million in capital to upgrade the city’s water and wastewater system.

But an analysis of Goodyear’s water, wastewater and sanitation revenues and operating expenditures over the past five years from 2011 until 2015 shows that since 2011, Goodyear has collected about $70 million dollars more than these enterprise funds have spent on operating costs during the same period.

Goodyear has collected over $140 million dollars in fees for water, wastewater, and sanitation, from 2011 through 2015 while the cost to operate those same entities has only amounted to a little over $70 million dollars. And now they need to double your rates because the systems need $50 million in capital? Does that make sense to you?

They say they need to double your utility rates over the next five years but it appears that they have already been collecting nearly double the operating costs since 2011, a whopping $70 million dollars.

This is the same City of Goodyear city council who is in debt to the tune of $400 million dollars, can’t afford to pay principle on it’s $100 million dollar baseball stadium, but always seems to have plenty of money for pay hikes, trips to Washington DC for council members, and $12 million dollar buildings that only appraise at $8 million. It looks like they have been over collecting on utility bills in order to keep up their reckless spending instead of saving the money for capital projects.

Details
In FY 2015, (most recent year actual values are available) the City of Goodyear charged taxpayers nearly $12 million dollars for water services. But according to Goodyear Budget documents, Goodyear only SPENT $6.8 million supplying water to Goodyear taxpayers.

That’s a $5 million dollar difference between what Goodyear collected and what they spent supplying water.

In the same year, Goodyear collected $13.1 million from taxpayers for wastewater. Budget documents show Goodyear spent only $4.7 million operating wastewater. An $8.4 million difference.

And finally, in FY15, Goodyear collected $6.9 million for sanitation, and spent $5.8 million. A $1.1 million difference. And they contract out sanitation.

So in FY 2015, Goodyear collected nearly $15 million dollars MORE for your UTILITIES than what they spent providing them.

A one time event?

They had other unexpected costs that year?

They had some new capital expenses they had to collect for?

It’s not a one time event. They’ve spent the money elsewhere.

Still don’t believe it?

Schedule 6 of the Goodyear Budget is called, “Interfund Transfers.” Here is a link to just the past two years of Schedule 6 “Interfund Transfers.” goodyear-intrafund-transfers

You will see in my notes on the pages, (funds taken OUT of Utilities and put Into General Fund) that every year millions of dollars have been moved from the utility “Enterprise Funds” into the General Fund.

Why?

Like I told you, so Goodyear City Council could spend your utility money elsewhere.

Mail Fraud?


img_6374Did you get this laughable advertisement in the mail this week?

I was going to write this week about how Goodyear has been overcharging you by millions of dollars every year on your utilities (water, wastewater, sanitation) but then I found this nonsense in the mail and figured I might as well give you the real facts instead of GEOrgia’s made up ones.

This will be short. I’ll take each of her claims line by line.

Georgia says in her ad that she;

  1. Reduced the city’s food tax. She doesn’t tell you that she was part of the group who originally put it in and she also doesn’t tell you that its a big nothing, a few hundred thousand dollars a year.  I think on a $100 food bill it “saves” you about 25 cents.
  2. Saved taxpayers $27.4 by refinancing.
    Schedule 4 of the City of Goodyear Budget document is called “DEBT SERVICE.” As most of you probably know that means how much money the city pays out each year for all of its outstanding loans. Goodyear has a lot of loans. About $400 million dollars of loans.
    The FACTS ARE,
    Goodyear’s FY 17 Schedule 4 states the following;

    Actual FY15 debt service of $19 million dollars.
    Estimated FY16 debt service of$25 million dollars.
    Budgeted FY17 debt service of $27 million dollars.

    Does that sound like SAVINGS to you?
    Maybe GEOrgia feels that when she spends only $80 a month for make-up because there is a 20% sale at Kohls instead of the $100 a month she normally spends on makeup she is “saving” $20 instead of “spending” $80.
    I understand that Goodyear has been refinancing their loans to take advantage of once in a lifetime low interest rates but I also think they are EXTENDING them. I don’t know that for sure but I suspect its so.

  3. Eliminated structural deficit.  She did this by raising your taxes and utility bills, and overcharging you for utilities and putting the extra money into the General Fund.  (next week’s article).
  4. Streamlined city departments. I guess city management told GEOrgia that a reorganization saved money. They still hired more people and the city budget is over 30% higher now than it was when GEOrgia was elected.
  5. Fought against wasteful spending. Well all politicians say this don’t they?
  6. Lifelong Republican. Well, we all know by now that THAT does not mean fiscally responsible now does it?

Six Years of Making the Ballpark an Even Bigger Loser


img_0094

In 2016 Goodyear taxpayers PAID every spring training attendee the equivalent of $62 for every seat purchased.

I assume you all know that the Goodyear Ballpark is a big money loser, (about $10 million per year in losses) that we signed up to a ball park contract that sucks for taxpayers, and that we will never get our promised capital reimbursements from the valley sports authority.

You all know that, right?

But do you realize that Goodyear collects about $7.5 million in TOTAL primary property taxes each year?

ALL YOUR PROPERTY TAXES AND THEN SOME GO TOWARD PAYING FOR THE LOSSES AT THE GOODYEAR STADIUM.

But it’s even worse than that.

Not only is the Goodyear Ballpark a loser for taxpayers, but your city management and incumbent city council have managed to make it an even BIGGER loser year after year after year.

Wouldn’t you think that any responsible public official who realized that MORE than the total primary property tax was paying for a losing investment would do EVERYTHING POSSIBLE to REDUCE those loses?

But not Goodyear.

Here are the facts. (Actuals are only available through 2015 so that is as far as I can show actuals. Budget figures are noted.).

Taxpayers pay about $8 million each year in debt service for the bonds that financed the ball park. (Goodyear WAY over charges you for your utilities in order to pay for that but I’ll discuss that in another post.)

But let’s just forget about that for a minute. Its a sunk cost, and unless someone in the city had the will and ability (which they obviously do not) to go renegotiate with the billionaire owners of the Indians and Reds for a better deal for taxpayers, those debt service costs are with us for a long, long, long time.  In fact, the original bonds extended BEYOND the date of the end of the contract Goodyear has with the Indians and Reds. So conceivably, both teams could leave and taxpayers would still be paying off the stadium.

And… Goodyear has NOT paid off any of the near $100 million in PRINCIPLE for the stadium.

And finally, before we leave the debt issue, in November of last year Goodyear said they would refinance and EXTEND further the life of the stadium bonds.

So your grandchildren can pay it off.

But it’s even worse than that, thanks to year after year bad decisions by the incumbent city council on the year to year operation of the ball park.

From 2011 to 2015, Goodyear has increased ball park operating expenditures from $3.5 million per year in 2011 to $4.1 million in 2015 with a peak of $4.3 million in 2014, and they have budgeted $4.4 million in 2017.

If all that spending had increased revenues and lowered operating losses at the stadium, that would be good management. But in fact, since 2011 operating losses at the stadium have increased year after year.

In 2011, the Goodyear ball park had $3.5 million in expenditures.
In 2011, the Goodyear ball park had $1.5 million in revenues.
For a total OPERATING LOSS of about $1.9 million.

In 2012 the operating loss was also $1.9 million but it could have been lower except for an increase in expenditures which rose to $3.7 million.

In 2013 (when the current incumbents were elected) the operating loss increased further to $2.2 million on expenditures of $3.9 million.

In 2014 the loss was $2.1 million on a whopping $4.3 million of expenditures.

But what about the City of Goodyear 2017 Budget?

Goodyear has budgeted its highest stadium operating expenditures yet at $4.4 million and another operating loss of over $2.1 million.

If, during the five years from 2011 to 2015 the Goodyear city council had merely demanded that operating losses at the stadium NOT exceed the 2011 amount of $1.9 million, then taxpayers would have saved over a half a million dollars.

And if they were interested and even capable of managing taxpayer money responsibly, they could have saved taxpayers even more.

Add in the $8 plus million of debt service (no principle payments) and the ball park costs taxpayers over $10 million per year.

That means that thanks to your Goodyear mayor and incumbent city council, Goodyear taxpayers PAY over $62 PER ATTENDEE to attend a spring training game.

Every attendee, every game, all taxpayers. $62 per person who sits in a seat in the Goodyear ballpark during spring training.

I hope you like people from Ohio, because you’re doing them a really big favor.

 

 

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