The McDowell Sonoran Preserve Commission is seeking the creation of two endowment funds proponents say will ensure consistent and sustainable operation and maintenance resources are available for future needs.
Scottsdale City Council, Tuesday, April 10 hosted a special work study discussion for the preserve and staff members to float the idea of creating the endowment funds that appears to only be possible if amendments are approved to the use of voter-approved tax dollars that created the McDowell Sonoran Preserve.
Some say the change could be connected to plans for the Desert Discovery Center while others say this is a way for, in perpetuity, making funding available for land and operations eyed by city leaders that wouldn’t come from the General Fund.
According to Kroy Ekblaw, the city’s preserve director, there is $178 million in uncommitted cash for proposed, land acquisition and debt-service obligations for the McDowell Sonoran Preserve over the next several years.
The commission contends if endowments would be created the municipality could see a yearly savings of $750,000 to $1.25 million if an annuity — in this case a preserve endowment — were to be created and certain returns realized in the open market.
But those returns would likely not be achieved until some time in the mid-2020s or early 2030s, city officials have opined.
The Scottsdale McDowell Sonoran Preserve encompasses 30,000 acres of land within the rough boundaries of the Pima Road alignment to the west, McDowell Mountain Regional Park to the east, Stagecoach Road to the north and Via Linda Road alignment to the south.
Most recently, Scottsdale acquired 2,365 acres of land at the McDowell Sonoran Preserve at a state land auction held in November 2014. The city’s successful bid was $21.3 million — about $8 million of that came from a Growing Smarter State Trust Land Acquisition Grant approved by the Arizona State Parks Board in September of 2014.
The endowment funds would provide for:
- Future preserve operations with an annual annuity payment of about $1.2 million.
- Future preserve related research and education costs with annual annuity payment of about $100,000 to $125,000.
Current projections for planned acquisitions and operations through 2034 include:
- $48 million to acquire more land for the preserve.
- $17 million to planned preserve improvements.
The city of Scottsdale spends $671,911 on preserve operations including staff, contractual services, utilities and maintenance and what is listed as “indirect costs.”
‘Pluses and minuses’
“We have worked through many plans,” said Bob Frost, chairman of the McDowell Sonoran Preserve Commission, at the onset of the work study discussion. “This recommendation comes with 100 percent support from your commission.”
That recommendation is that the city council forward on to voters a question requesting an amendment to the allowed uses of preserve tax funds in order to establish two endowment funds, a May 10 staff report states.
Former McDowell Sonoran Preserve Commission Chairman Jim Heitel echoes that sentiment.
“This is two years in the making,” he told council. “But most importantly here, is that this is not an additional tax. This is recognition of the limited remaining funds in the account, if you will. Our opportunity to buy more additional lands would be minimal.”
City officials speculated a $30 million annuity would generate enough returns to free the General Fund — and the city’s 1.65 percent food tax — from providing dollars and cents into the preserve fund.
“The bottom line is this seems to provide something for almost everybody,” Mr. Heitel said. “There are those who have groused a little bit about the preserve taking money from the General Fund — this really speaks to their concerns.”
Preserve officials say there are three options on the table:
- Move to establish the endowment funds following ratification of the plan by local voters;
- Move to establish the endowment funds following ratification of the plan by local voters but first paying off bond debt;
- Move to establish the endowment funds following ratification of the plan by local voters with paying off bond debt and taking out food tax remits to preserve allocations.
“We really wanted to give the council options,” Mr. Frost pointed out. “This creates a fund in perpetuity — we really think this is the right thing to do.”
While Scottsdale City Council members lauded the approach to preserve funding in perpetuity — Vice Mayor David Smith points out there are “pluses and minuses” to this equation.
“I can see pluses and minuses here. It bothers me that we would be taxing citizens to create a savings account,” he said at the work study. “We don’t have a savings account to make sure the library is open. We don’t have a savings account to make sure the parks stay open. What we are really doing here is freeing us from future liability.”
Vice Mayor Smith says the plan could prove most beneficial as the endowment would free the preserve fund from the travails of up and down years.
“It will help us through the dips of the budget process,” he said.
“We are probably 16 years ahead of time and it may be the first time government did something early. I would very much like us to commit to removing the food tax and I do favor giving the voters an opportunity to have a voice on how this money is spent.”
Scottsdale Councilman Guy Phillips, along with his fellow councilmembers, agreed pursuing more concrete plans from the endowment study is warranted.
“You had me at endowment,” he quipped. “I don’t see any reason for us to not investigate this further. You have my full support.”
North Valley News Editor Terrance Thornton can be contacted at 623-445-2774 or at firstname.lastname@example.org