City Council candidates opine merit of pending Scottsdale sales tax measure, infrastructure costs

Scottsdale voters Tuesday, Nov. 6 will elect three people to Scottsdale City Council.

This election year showcases a total of five candidates seeking three city council seats during the upcoming general election.

The incumbents are: Kathy Littlefield, David Smith and Linda Milhaven, meanwhile the challengers are Bill Crawford and Solange Whitehead.

In partnership, the Scottsdale Area Chamber of Commerce and the Scottsdale Independent are hosting a candidate debate at City Hall, 3939 N. Drinkwater Blvd., from 6 to 7:30 p.m. Monday, Oct. 1, which will be aired on local cable access.

In early spring, seven people pulled packets, but one candidate — Becca Linnig — opted to pull out of the race prior to the May 30 signature deadline. One candidate, Alyssa Robis, failed to successfully defend a challenge in Superior Court for her qualifying signatures and dropped out.

However, the field is set, and the Independent offers its third installment of an eight-part, question-and-answer series to help readers better understand the motivations and beliefs of these five candidates.

The Independent reached out to each candidate seeking to better understand their interpretation of a pending sales tax pursuit at City Hall and how they believe to best pay for crumbling infrastructure throughout pockets of the municipality.

There are 118 Scottsdale infrastructure projects city leaders have identified carrying an estimated cost of $810 million, but elected leaders readily admit municipal needs exceed existing funding sources and mechanisms.

Last May — by a 4 to 3 measure — Scottsdale City Council approved a resolution ultimately destined to materialize in a ballot measure where city officials will ask for a .10 percent increase to local sales tax in hopes of raising just over $70 million to help pay for transportation projects

This is what they had to say:

David Smith

David Smith

•The result of critical infrastructure costs continue to emerge throughout pockets of Scottsdale, how did certain city streets, roads and bridges get to this point?

The city has significantly under-invested in its infrastructure for several years. With $30 billion of depreciable assets and an average 30-year asset life, re-investments need to be $100 million every year. The last time a bond issue of that size or more was approved was in 2000 — 18 years ago!

Reflecting this reinvestment neglect, the net book value of the city’s depreciable assets has declined every year since 2008. This is no longer an “accounting” discussion; streets, bridges, buildings, parks and other depreciable assets are showing their age — some by threatening catastrophic and costly failure.

I warned City Council when I was city treasurer this is not a fiscally sustainable path for the city to be on. As a councilman, I have continued the alarm, urging council to seek voter support for a major reinvestment program.
Unfortunately, council has presented a mixed message to voters. Rather than admit the severity of the needs, some have argued the needs are being exaggerated or suggested the Council cannot be trusted to invest wisely.

Even arguments without merit can confuse voters to the point of simply saying “NO.” Capital investment needs do not go away because we “will” them to: they become additive and compound over time. That’s why we now have a backlog of $800 million critical investment needs.

•What do you make of this sales tax measure headed for the ballot?

I will be voting for the ballot question because the capital needs of the city are at a desperate level and any amount of capital funds from any source will be a welcome infusion.

Voters should be aware, though, this is not the right amount of funding. The sales tax, if passed, will generate only about $10 million a year. Voters should be reminded this revenue is a mere 10 percent of what we need to invest every year.

Voters should also be aware this is not the right way to fund major capital expenditures. It gives the business community a “free ride,” because businesses don’t pay sales tax. It gives out-of-town property owners a “free ride” and it gives a virtual “free ride” to snowbirds. The only parties taxed in this measure are citizens and tourists. And the citizens who have the least are taxed, proportionally, the most.

Voters should realize this funding approach collects the tax before the capital investment is made. A capital program funded with bonded property tax assessments makes the investment first, then issues reimbursement bonds supported by taxes collected over 20 years.

I urge voters to join me in approving this year’s ballot question, then join me in supporting a real capital funding initiative next year to restore the luster of our City.

•What do you believe to be the most important role of your local government?

Our most important responsibility is insure the safety of the public — in the broadest sense of the term. It may begin with support for police and fire protections, but it expands to insuring the safety of our infrastructure and the safety of transportation. It includes a responsibility for insuring the safety of our entertainment district. It means protecting our citizens, as best we can, from public health risks like opioids or the ZIKA virus. Much of what council does is couched in goals of improving livability, but the livability of our community begins and ends with safety.

Linda Milhaven

Linda Milhaven

•The result of critical infrastructure costs continue to emerge throughout pockets of Scottsdale, how did certain city streets, roads and bridges get to this point?

Normal wear requires maintenance and, eventually, replacement. Historically, the city paid for improvements with bonds supported by property tax and, prior to the recession, with budget surpluses. Cumulatively, since the recession, sales tax revenues are down almost $170 million and we have not yet completely rebounded to 2007 levels. During that time, property tax revenues remained flat. Since local sales taxes make up about half of the General Fund revenues this decline had a dramatic impact. Property tax represents about 10 percent.
The recession demanded that we scrutinize all of our spending. To maintain critical services, like fire and police, we deferred infrastructure improvements. Now, we must get back to investing in our infrastructure. What we are able to invest out of our existing reduced revenues is not enough to keep up with our needs.

•What do you make of this sales tax measure headed for the ballot?

I will be voting yes on Question No. 1 to raise sales tax for road improvements. Without the additional revenue, we will not be able to claim over $170 million in county matching funds. Even with this increase, we will have one of the lowest sales tax rates in the region.

Despite my support of this measure, a bond supported by property tax is a more prudent way to fund capital infrastructure needs. Property tax is a more stable income source and is less expensive. Property owners who itemize their deductions on their tax returns realize a tax benefit that discounts a property tax dollar making it less expensive than a sales tax dollar.

The sales tax will run for 10 years, but we need this money in the next few years, so we will need to bond against future revenues. Bonds secured with sales tax have a higher rate making it more expensive than a general obligation bond supported by property tax.

In addition, sales tax varies with the economy. If we have another down turn and sales tax is not adequate, we will need to reduce services or find other revenue sources to repay the bonds. It is my hope that we can pass the sales tax to capture the county matching fund and then come back to the voters with a bond election supported by property tax.

During our work study session this spring, the City Council subcommittee presented the result of their year-long review of our needs and found that we have $600 million in unmet needs. The entire City Council agreed that we do not have the resources to fund these improvements and must find new revenue sources. We only disagreed on sales vs. property taxes.

Some may be reluctant to put forward another bond election because voters have turned down recent bond questions. In those elections, the Council was divided and some Councilmembers campaigned against the bond.

Today, from our most recent conversation this spring, it is clear that the City Council unanimously agrees that we need to find new revenue sources to fund our infrastructure. With this new agreement, I believe we can do the right thing for the city and bring forward a new bond package that will help us maintain the quality of our city.

•What do you believe to be the most important role of your local government?

City government is about the health, safety and quality of life of our community. We efficiently provide high quality services — fire, police, roads, parks, libraries, trash removal, water and sewer, among others. We do this by being good steward of the tax dollars and by ensuring a robust local economy that provides jobs, strong sales tax revenues and solid property values.

Kathy Littlefield

Kathy Littlefield

•The result of critical infrastructure costs continue to emerge throughout pockets of Scottsdale, how did certain city streets, roads and bridges get to this point?

The biggest cause of our infrastructure problems is overdevelopment, which clogs our streets and stresses our infrastructure. The number two cause is the City Council majority has not had the foresight — or the discipline — to prioritize those needs and budget for them on a regular basis. Our bridges especially have not received the needed cyclical repairs because we have not set aside the money for them. Now, years late, the needs have become so critical we have to completely rebuild two of the bridges.

•What do you make of this sales tax measure headed for the ballot?

By passing Question 1 on the ballot in November, citizens will go a long way toward getting the money we need for many of our transportation needs. For 18 years Scottsdale citizens have been paying County Prop. 400 taxes — an approved tax by the voters for transportation needs in Maricopa Co. We have a huge $140 million balance available through 2020 which will pay us back for city projects that meet its criteria. There are about 22 of these projects throughout the City. But we must have a dedicated income stream to match with those available funds to get Maricopa Co. to release them to us.

Otherwise, the money will go to other county cities for their needs. I want our citizens’ tax dollars to go to Scottsdale’s needs. The 1/10 of 1 percent sales tax increase for 10 years will bring in about $70 million new dollars which, added to the Prop. 400 matching funds will provide for a total of $240 million in transportation funding to fix our streets and sidewalks. We would be foolish indeed to turn those dollars away from Scottsdale, especially when our citizens have already paid the majority of the tax money.

•What do you believe to be the most important role of your local government?

The most important function of local government is public safety. Residents deserve a safe and secure environment in which to live, work and raise their families. Keeping Scottsdale residents and visitors safe has always been my No. 1 priority, which is why police and firefighters have endorsed me for re-election.

Bill Crawford

Bill Crawford

•The result of critical infrastructure costs continue to emerge throughout pockets of Scottsdale, how did certain city streets, roads and bridges get to this point?

When the Great Recession hit, businesses closed, construction projects were halted, and jobs were lost all across Scottsdale. This resulted in a reduction in sales tax revenue for the city. Furthermore, property tax revenues and development fees for the city plummeted.

Additionally, proposed bond ballot questions were defeated due to organized opposition. Scottsdale voters were convinced they could not trust that the money raised would be put to good and proper use. With all this combined, our infrastructure slowly deteriorated and there wasn’t enough funding to sustain and repair our transportation assets.

•What do you make of this sales tax measure headed for the ballot?

I support the proposed measure. Passing this measure will provide much-needed revenue for transportation improvement projects throughout Scottsdale.

The last $300 million bond proposal couldn’t make it past the city council to get on the ballot, leaving critical transportation infrastructure needs unfunded. After years of inaction, this measure has been proposed.
Voter approval of this ten-year revenue generator will pay for critical transportation infrastructure needs and we will capture $170 million in Maricopa Association of Governments transportation funds contributed by Scottsdale taxpayers. This is a fiscally responsible response to the issue. Improving Scottsdale’s transportation infrastructure now is critical to making our streets, roads and bridges safe, easing traffic congestion, and enhancing our quality of life.

In review, the math is simple: We invest $100 million over 10 years to get $170 million in funds from Proposition 400, the county-wide, half-cent sales tax for regional transportation improvements that voters supported in 2004.

If we fail to make this investment, Scottsdale loses out on these regional transportation funds — not just now, but forever. To me, this is not acceptable.

This fiscally responsible and practical solution will suffice for our immediate transportation funding needs and will allow us to capture crucial Proposition 400 dollars.

I believe the next step for the city council is to produce a comprehensive funding proposition that addresses additional unfunded capital investment needs.

•What do you believe to be the most important role of your local government?

I have always believed that the primary responsibility of local government is to provide quality and effective public safety services. However, we must provide our public safety professionals the resources they need to keep us safe and secure.

Therefore, our immediate attention and most important role must be fiscal responsibility as we resolve our city’s financial situation and keep the shine on Scottsdale. This will protect our unique brand, quality of life, vibrant economy and property values.

Solange Whitehead

Solange Whitehead

•The result of critical infrastructure costs continue to emerge throughout pockets of Scottsdale, how did certain city streets, roads and bridges get to this point?

Scottsdale’s financial crisis is not from lack of tax revenues. It is because a City Council majority lacks fiscal discipline, prioritizes special interest projects over public safety, and has up-zoned large swaths of our City without increasing development fees to cover future infrastructure costs as is done in other Valley cities.

All of which was on full display this summer when the City Council tossed our interests to the wind by approving the 1,000-acre Crossroads East project behind closed doors: without traffic analysis or sufficient infrastructure funding; overriding existing zoning; spurning community opposition; and without setting aside land for a fire station. To boot, City Council gave $22 million of our tax dollars to the developer without the City Treasurer being able to identify how we can pay that bill.

This is why Scottsdale’s once flush rainy-day fund is bone dry and is the reason tax payers are facing $800 million of unfunded infrastructure needs. It is why Scottsdale’s beautiful Civic Center pedestrian bridge & underpass is closed “indefinitely.” The City Council majority found millions of tax dollars to fund the Desert Edge/DDC study but came up empty handed on funds to maintain our bridges.

•What do you make of this sales tax measure headed for the ballot?

I will vote for the transportation tax, but taxpayers should never have been put in between a rock and a hard place.

The 0.1 percent tax will provide a revenue stream that the City can borrow against. In turn, that funding will allow Scottsdale to be reimbursed $170 million of tax dollars that we already paid into a regional transportation fund. The combined funds will be used to make our roads safer.

The urgency of the tax has to do with a requirement and a looming deadline:

  1. For reimbursement, Scottsdale needed to set aside 30 percent of the project’s cost to receive the 70 percent balance from the fund. City Council chose not to do this.
  2. If Scottsdale misses the fast-approaching deadline, our community loses our investment. Instead of funding our roads, $170 million of Scottsdale tax dollars will fund transportation projects in other Valley cities.

This is another example of how City Council’s misaligned priorities is jeopardizing public safety and how fiscal mismanagement is digging Scottsdale deeper and deeper into a financial hole.

Scottsdale’s stunning achievements, quality of life, and prosperity happened when the City Council put residents first. Today’s City Council majority does not share our priorities. I’m running for City Council to turn that around.

•What do you believe to be the most important role of your local government?

Prioritizing public safety, infrastructure maintenance, and quality of life investments, while safeguarding our tax dollars from special interests.

Northeast Valley Managing Editor Terrance Thornton can be contacted at tthornton@newszap.com

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