GY Council Debates $30k Savings Differential 7 Years in the Future. (But why won’t they just call Gilbert?)

In their October 17 working session, GY council heard two proposals about reducing debt service at the ballpark by re-issuing debt from GY Finance Dept.  They can do one or the other. GY Finance wanted council to tell them which one council preferred so that GY council could vote on the measure at the next council meeting (which they did and it passed see

One option was worth (my calculation) $58,000 more than the other one, and while it could be implemented now, it’s impact would not occur until about 2018.*

GY council spent nearly 20 minutes just debating the difference between these two proposals at their October 17 work session. **

But no one in the city has the time to look into a near certain*** $25 to $50k savings idea for each election cycle that GY citizens have suggested.   Even at the lower estimate of about $25k per election, the present value of that proposal is worth $68,000.  At the higher amount, double that.

Go figure.

*At question was to restructure the new bonds to save the debt expense now and gain $200k per year in the next 3 years vs. a restructure that would give them $230k per year, ($30k more but later in time) also for 3 years but starting in 2018 when the actual spike in debt service payments would occur.

** More on this later, since it was obvious from the GY council discussion that with the exception of Pizzillo no other council members even properly understood the concept around the before or after money. Gelzer thinks there is a bank to put savings into. Georgia doesn’t know whether to agree with Gelzer’s point or Pizzillo because she doesn’t really have a clue about what they are talking about, she asks where Lange can invest the money, (a piggy bank, Georgia says)  and Lange dances a little while he tries not to embarrass Georgia in an open meeting by telling her this is debt restructure that will go to reduce the General Fund imbalances we are facing soon and it’s not near enough money to even cover the problem of the spikes in 2018.

*** Gilbert, AZ previously implemented this measure in under 45 days with a council vote.


5 Responses

  1. I don’t believe the debt service is paid from the general fund, but I haven’t had a chance to view the council meeting.

    You are correct, the general fund does show a deficit in the future, I believe it is currently estimated around $3 million. However, the city manager makes it clear in every budget that he DOES NOT figure construction sales tax into the budget due to its volatility. Which, seems to be a smart move. Also, the city manager has said the good news is it can never be negative. Typically at the end of the year, the construction sales tax more than covers any deficits. What is guaranteed to fund it for the next 2.5 years? The construction of I-10/303 Interchange. The entire area of this construction is within the city and annexed years ago. Bid amount? $133 million which the city will collect construction sales tax. The city is very fortunate to have this construction within its boundaries because every bit of revenue helps.

    There are some bright spots out there…

  2. Check it. I heard Lange say that money from the GF was being used to make up the difference in total costs at the stadium. Whether it goes directly to that fund or not is immaterial in my opinion, either way it is a drain on the GF.

    • You are correct. GF revenues are being used to subsidize the operations budget at the stadium in the range of $3 million for FY2012. The stadium is setup as an enterprise fund, which means it should be self sustaining through its revenues which should meet or exceed its expenses. From a practical standpoint, this will likely never happen.

      Other cities have different approaches to the operation of their stadium facilities. Glendale, for example, chooses to have the MLB teams to jointly operate the stadium facility (Camelback Ranch).

      • I think they should be out trying to find someone else who would be willing to buy, lease, operate it, whatever. Just to try to get someone additional on the hook for the liabilities in some way. Book the Rolling Stones for God’s sake.
        Nice folks trying to make it less costly for the city but I think we need help to turn it around.

  3. That’s the best aswner of all time! JMHO

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: