What Goodyear Should Do

I’ve told you many times that the current GY city council and city management are doing the wrong things, that they are spending too much money, that they have still not taken the prospect of GY’s financial failure seriously.

Now I’m going to tell you a few specific things that I believe they should be doing.

What follows are ten recommendations for what I think GY should do right now.  I believe, if implemented, these recommendations would reduce GY’s spending / increase GY’s revenues by over $10.1 million per year.  Today, your city council and city management are doing none of these things.  My guess is there is a lot more that could be uncovered than what I discuss here, but I only have so much time and they are mighty uncooperative since Georgia took over.

In the first three recommendations below I encourage GY to use the prospect of Chapter 9 Bankruptcy to its best purposes now.  An entity does not have to declare bankruptcy in order to be able to take benefit from the potential threat of bankruptcy. This is what any struggling independent company does with it’s suppliers and creditors and all I am suggesting is that GY start treating the taxpayers’ money like it was their own money in a similar way.  It is not easy, it is stressful for both sides, and it takes a lot of time.  But I believe that without some significant change in GY operating procedures it is only a matter of time until GY reaches that point anyway.

What GY has to do in each of the first three cases below is convince GY’s partners and suppliers that it’s a GOOD POSSIBILITY that they might have to deal with GY after GY declares Ch 9 Bankruptcy. If that happens (and the creditors/suppliers will know this) GY can reject any existing contract of GY’s choosing if they want.

Think about that last statement.  If GY declared Chapter 9 bankruptcy, GY would be able to reject any current contract that they have with another entity and only keep the ones they like. That’s a big deal.  Think Indians, Reds, Westcor, CTCA, Sunteck, Sub Zero…..

Here are the 10 recommendations.

    1. Indians and Reds. (+ $4 million). Tell the millionaire owners of the teams that things look pretty bleak.  Have Larry Lange make a grim presentation based upon his and Terry Canada’s “long range forecasting tool” that they showed GY council on Oct 17.  FOR ONCE just assume the worst and hope for the best rather than GY’s normal opposite approach.GY taxpayers are spending $100 PER FAN TICKET to have these millionaire’s ball team’s fans here in March. (See my previous article for the details.  https://howardsgoodyearblog.com/2011/04/06/the-goodyear-stadium/  ).  My calculations show that the stadium costs taxpayers as much as $12 million per year all in.  $ 2 mil is operating costs and another $5 mil is interest expense. But last year, @ $40 spent per paying customer, there should have been about $5 mil in revenues.  GY only got $1 mil.  The Indians and Reds got the rest because by contract they get nearly 80% of everything. The conversation would go like this.

      “Dear Team Owners. If we don’t do something right now, we believe there is a good chance that GY will have to declare Ch 9 and then we would have to reject our lopsided current agreements with you and begin anew with one that will favor taxpayers. Therefore, between now and whenever that may happen, we find it necessary to limit our stadium operating costs to one ticket taker and one gate keeper at the stadium during March and lay off everybody else.  Sorry in advance for the long lines.
      However, we do have an alternate proposal.  We propose to change the current 20/80 revenue split which is currently in your favor to 75% GY / 25% teams on everything except your merchandise, which you can keep.  We do that until year 10 of our agreement when we agree to negotiate in good faith to restore the original agreements assuming GY is still a float.”

    2. Westcor.  (+ $ 1 mil per year) Same thing.  Just change the numbers and references above. See my previous article for the details. https://howardsgoodyearblog.com/2011/06/15/2362000-of-your-tax-dollars-and-counting/  No more sales tax revenue to Westcor.  That money (running at more than $1 mil per year) comes to GY until the mall is up and operating.The agreement we made to allow you to extend the start up for a measly $1.3 million?  Instead, we want to use Larry Lange’s optimistic charts of many more millions of dollars per years of tax revenues as your cost to extend if you want to continue to buy your way out of the original deal.   We’ll also eliminate the special treatment and discounts you’re getting on permit fees.

      You don’t like our offer Westcor?  The alternative is that we will find it our civic duty to our taxpayers just as you answer to your shareholders, in order to save money and reduce our risk of losing essential services, to immediately lay off every GY employee who has, or may be involved in, currently or in the future, with approving, inspecting, and in any other way facilitating your start up.  We’ll farm it all out and leave one guy in charge to look over the work when he has the time because it might just be our city manager is all that’s left to turn out the lights.  It might cause significant delays to you but we really don’t have any other choice, do we?

      And by the way, Westcor.  Before you start poor mouthing us about $1 million measly bucks we noted in your parent company Macerich’s latest news release http://www.macerich.com/investing/investing.aspx?v=news_financial that you upped your dividend to your shareholders (which indicates you don’t have anything better to do with your money) by 10%. Since you have over 130 million shares outstanding, the dividend INCREASE is more than $25 million per year.

    3. St. Gobain, Suntech, SAS, Sub Zero, and any other resident business who recently got, or currently has corporate welfare from GY. Same plan as Westcor.  Tear up the agreements or services will be minimally available until further notice.  How much is this worth?  Who knows. Maybe a lot.  Got to be a couple million a year, though, given all the hubbub made about them.
    4. All city departments implement a 5% expenditure cut with no service reductions.   Don’t think you can make that happen Mr. Department Director?  Thanks for your service, we’re promoting from within, who was your highest rated employee last year in your department? +$3 million.
    5. Repeal the Meet and Discuss ordinance. Too many rules, too much work, we don’t have the money to pay staff to manage something like this.
    6. Repeal the 1% for the arts ordinance. We can’t afford it right now.
    7. Get a real handle on where retirement and benefit costs are going in GY with some realistic numbers and define a plan to limit their future increases to no more than annual average AZ employee income increases or some other similar measure.  Here is my article explaining how GY has ignored it. https://howardsgoodyearblog.com/2011/10/06/city-files-for-chapter-9-bankruptcy/
    8. Find out how GY can un-annex Mobile and then do it.
    9. We pay 7 council people nearly $100,000 per year in salary. They should all surrender it. Wally claimed during the campaign that she didn’t even know it was a paid position so she shouldn’t miss it, should she?
    10. Don’t spend the money that GY receives in savings from the 9 programs above.  Start equally paying down debt and lowering the cost to live in and do business in GY for property owners, small businesses, and consumers.  This would include property taxes, permits, inspections, and sales taxes. Put all city directors on a significant bonus program which would allow them to add up to 25% to their salary each year if goals are achieved. In order to do this, in addition to passing a published working budget use a 15% lower budget or a budget which is no greater than the previous year’s actual spend as the target for the directors’ bonuses.  This is similar to what Litchfield Park does.

My easy to use GY council email list can be found in the upper left of all categories on this page.


6 Responses

  1. If you worked for the City, I’d come work for you to implement each and every one of these… my prediction, not one will be implemented.

  2. I would come work for you as well; together we could make GY a profitable, low cost high quality city. It is so simple to fix this, hard but simple, why they disregard the truth and believe the rhetoric is beyond me.

  3. Not bad ideas at all. As for deannexation, it is only allowed if another entity annexes the area in return. This happens a lot between Goodyear and Buckeye.

  4. Umm, are you really just gvinig this info out for nothing?

  5. This was so hepflul and easy! Do you have any articles on rehab?

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