Scottsdale City Council candidates differ on how to pay for growing infrastructure costs

Election Art option 2

Scottsdale voters will hit the polls Tuesday, Nov. 8 to elect three people to city council and a mayor after foregoing a primary election process due to a limited number of candidates.

Scottsdale mayoral candidates are Mayor Jim Lane and challenger Bob Littlefield while council candidates are Dan Schweiker and incumbents Suzanne Klapp, Virginia Korte and Guy Phillips.

Leading up to the election, the Scottsdale Independent and Scottsdale Area Chamber of Commerce will be hosting two debates in addition to a weekly question-and-answer series provided by the Independent to help voters better understand where they stand on issues that matter.

The first debate, sponsored by Comerica, will be Tuesday, Sept. 27, focusing on the mayor’s race while the second debate, Tuesday, Oct. 4, will focus on city council candidates.

Both debates are from 6 to 8:30 p.m. at the Doubletree Resort by Hilton, 5401 N. Scottsdale Road and will be moderated by Scottsdale Independent Editor Terrance Thornton.

This week’s question-and-answer installment is on how these candidates view the growing costs of deferred infrastructure maintenance needs and how they will choose to pursue meeting those financial needs as two bond programs focused on those expenses did not receive a warm welcome at the ballot box.

The mayoral race

Both Mayor Lane and challenger, Mr. Littlefield, agreed to respond to specific questions about how they would go about addressing the growing number of infrastructure maintenance costs. This is what they had to say:

Bob Littlefield

Bob Littlefield

Bob Littlefield

•Infrastructure needs have been the focus of two bond programs that were not well-received by voters over the last few years. From your perspective should basic infrastructure costs be paid for through bond programs?

Scottsdale could pay for our infrastructure needs from our general fund revenues, without asking residents to increase their property taxes,  if my opponent the incumbent Mayor and his allies on the City Council would stop wasting tens of millions of taxpayer dollars every year.

They claim to run an efficient and austere city government, but the facts prove otherwise:

  • Before he retired as city treasurer, now Councilman David Smith publicly stated the city council was balancing the operating budget not by cutting expenses, but by cutting contributions to the capital budget. Unsurprisingly that cupboard is now bare, which is why, under my opponent’s “leadership” City Hall has had to ask Scottsdale voters twice in the last three years to increase property taxes to fund infrastructure maintenance.
  • Scottsdale residents pay the second highest General Fund cost per resident of any city in the Valley — only Tempe residents pay more.
  • Scottsdale has more employees per resident than any other city in the Valley. Interestingly, staffing for public safety (which should be the No. 1 priority of municipal government) isn’t the issue; those numbers are right in the middle of the pack. However, Scottsdale is overstaffed with executives, 155 of whom make six-figure salaries.
  • The mayor and his allies often tout the bar district as an “economic driver.” Actually, the bar district costs Scottsdale residents money. According to a study done by then-City Treasurer Smith, the bar district contributes less than $400,000 in annual revenues to the city but costs $1.2 million annually just to police the streets. And, that doesn’t even count the costs for maintenance (street cleaning, etc.) or code enforcement.
  • Scottsdale pays about $4.5 million every year to the Cultural Council to run a theater (the Center for the Arts) with declining attendance, a “Museum of Contemporary Art” that almost no one visits, and a public art program, which most residents do not like. For 25 years they have had a sole-source, no-bid contract, with no meaningful performance metrics. We should put the contract to operate the Center for the Arts out to competitive bid to see who would pay the city for the privilege of operating it! The $4.5 million we would save every year is enough to buy the land for and build a fire station, without any additional bonds or debt!
  • In 2014, the mayor and his allies on the city council voted (over my objections) to give golf pro Phil Mickelson about $2 million in taxpayer gifts in the form of a new clubhouse and other improvements to the city-owned McDowell Mountain Golf Course – improvements his lease required him to fund!
  • For 10 years, the city has been sitting on 80 acres of prime land at 94th and Bell. Every year Scottsdale taxpayers shell out roughly $3 million in debt service to hold on to that raw piece of dirt. It’s time to sell it and use the savings to fund some of our truly worthy and needed capital projects. If we had sold this land just three years ago, the $9 million in savings would have been more than enough to upgrade the outdated and overburdened citywide IT network — without asking Scottsdale citizens to increase their property taxes.

•Infrastructure improvement costs are abundant throughout the city of Scottsdale. If elected, what will you do to make sure infrastructure needs are met?

Scottsdale’s infrastructure maintenance and improvement needs can be funded without asking Scottsdale citizens to increase their property taxes by cutting the wasteful spending I listed above. If I am elected mayor I would slash wasteful spending, starting with these items:

  • I would cut the number of overpaid executives in city staff.
  • I would put a halt to special-interest subsidies such as the $2 million McDowell Mountain Golf Course gift.
  • I would put the contract to operate the Center for the Arts out to competitive bid to see who would pay the city for the privilege of operating it.
  • I would put the 80 acres of prime land at 94th and Bell — and all other excess city property — up for sale.

And that’s just for starters. There are many other areas where we could cut waste, but my opponent has shown no interest in looking into any of them. He claims to be a fiscal conservative but his record of never challenging all of this wasteful spending and never looking for opportunities to cut expenses speaks louder than his words. I, in contrast, have a proven track record of fighting against wasteful spending and special-interest handouts. I will bring that kind of tough leadership to the office of mayor.

Jim Lane

•Infrastructure needs have been the focus of two bond programs that were not well-received by voters over the last few years. From your perspective should basic infrastructure costs be paid for through bond programs?

Jim Lane

Jim Lane

I am an accountant by trade so I look very closely at the responsibility asked of taxpayers. That’s why I’m proud we have reduced the size of government during my tenure and are ranked by independent agencies among the best, most efficiently run city governments in the country. To be good stewards of the taxpayers, Scottsdale has historically gone to voters to fund long-term infrastructure costs like parks, libraries, public safety needs and other quality of life measures. This is wise policy as it gives voters veto power over capital projects they do not believe are a good investment for the city.

In the past bond election some items were passed and some were not showing Scottsdale’s discerning approach. Overall, I do think longer-term capital projects like parks and the other items I mentioned should be funded by long-term debt, especially when interest rates are low as they are now. Think of these projects like your house. Yes, you could pay all cash if you’re fortunate to be in that position but it likely makes more sense to buy your house with some kind of mortgage to best manage your money. And, manage money is something we do well as exhibited by Scottsdale having the top rating for bonds in the country. This achievement means when we need to borrow money we can do so at a lower cost to the taxpayer.

•Infrastructure improvement costs are abundant throughout the city of Scottsdale. If elected, what will you do to make sure infrastructure needs are met?

Because Scottsdale taxpayers have been discerning about approving long-term infrastructure projects it is imperative we have a pro-business, pro-jobs approach to generate the resources our residents want and deserve for short and long-term infrastructure projects. This is my approach and we came through the Great Recession by cutting government but not our quality of life. And, we didn’t raise taxes like many Valley cities did. Instead, we raised revenues with a pro-business approach. The number of jobs flowing into our Airpark, downtown, Cure Corridor along Shea and southern city mean more spending at stores and restaurants.  Enhanced tourism means more visitor spending at our hotels and other businesses. The result has been a strong Scottsdale that has preserved the Valley’s best quality of life.

However, should Scottsdale return to its anti-business policies of some 15 years ago like my opponent wants to do, Scottsdale will not have the resources to protect our quality of life and that which makes us special. Indeed, I don’t think he’s been endorsed by any business organization or any business at all in this election. That’s because his record is one of siding with groups like the UFCW who once employed horrific tactics to shut down a wonderful company like Basha’s. He’s even called for shutting down local entrepreneurs in our downtown. We both just competed for the endorsement of the Scottsdale Association of Realtors and I was proud to received the endorsement of this group that represents some 8,000 people in Scottsdale.

They like small businesses I have been visiting throughout Scottsdale understand that unless Scottsdale is pro-business we can’t be pro-resident because we won’t have the resources for infrastructure or the quality of life they expect. So a robust local economy and reduced size of government as I have championed will help us meet a number of key infrastructure needs but ultimately large projects such as parks, flood control and other items will have to go back to voters for their consideration.

The council race

City council candidates agreed to respond to specific questions about how they would go about addressing the growing number of infrastructure maintenance costs. This is what they had to say:

Guy Phillips

•Infrastructure needs have been the focus of two bond programs that were not well-received by voters over the last few years. From your perspective should basic infrastructure costs be paid for through bond programs?

Guy Phillips

Guy Phillips

Of course not! Those should be paid for with general funds received through developer contributions and taxes. Since when should a homeowner have to anti-up to pay for larger sewer, utility and water lines so a developer can build his high rise?

•Infrastructure improvement costs are abundant throughout the city of Scottsdale. If elected, what will you do to make sure infrastructure needs are met?

I have repeatedly stated the city has the money to fix any infrastructure problems. It’s not a matter of if we have the money, but rather how we spend your hard-earned tax dollars. My opponents say we need to bond for infrastructure because we don’t have the funds, yet when they want to build a Desert Discovery Center with a $3-4 million debt service every year, suddenly we can afford it!

Virginia Korte

•Infrastructure needs have been the focus of two bond programs that were not well-received by voters over the last few years. From your perspective should basic infrastructure costs be paid for through bond programs?

Virginia Korte

Virginia Korte

Since 1989, Scottsdale’s citizens have demonstrated great foresight, fiscal responsibility, and logical long-range planning by approving capital bond projects totaling over $700 million. Such purposeful investments resulted in the funding of what continues to make our city thrive and our citizens’ quality of life so stellar: libraries, parks, senior centers, public safety, transportation needs, a Cactus League baseball stadium, cultural and visual amenities, and so much more.

In fact, the only fiscally responsible process to fund capital infrastructure needs is through bond programs. Our General Fund primarily pays for the operations of the city like library services, parks and recreation, public safety and more. When, at the end of each fiscal year, there is an overage of income versus expenses, the Scottsdale City Council funded some capital improvement projects. The last eight years, we were able to invest $52 million in capital projects from the General Fund.

That is not nearly enough funding to satisfy our current capital needs, which exceed several hundred-million-dollars worth of projects.
Furthermore, capital infrastructure needs are best funded by bonds for two reasons: depreciable capital assets such as fire stations, are best paid for by revenues spread over a period of time, just like a personal home mortgage. In addition, businesses and out-of-state property owners contribute to the cost of capital needs (for which they pay approximately half of the city’s property tax income).

Our special quality of life is in large part due to our willingness to invest in the community through bonded capital projects. It is also our responsibility as stewards of our community to make it a more sustainable city for future generations.

•Infrastructure improvement costs are abundant throughout the city of Scottsdale. If elected, what will you do to make sure infrastructure needs are met?

The bond task forces of 2013 and 2015 vetted over $300 million of capital infrastructure needs out of approximately $1 billion of projects identified by city staff. Some believe we can fund these projects through our General Fund by tightening our belts.

The city’s General Fund budget of approximately $260 million is not large enough to skim off the monies needed for capital projects. While we have been able to fund approximately $6 million dollars of capital projects through unreserved funds per year since 2008/09, it is hardly enough to fund our citywide needs of depreciable capital assets totaling over $3 billion.

I believe our citizens are willing to reinvest in our community if the proposed bond measures contain only necessary capital projects and those projects are well-defined and that process is transparent. As community leaders, we must do a better job communicating our city’s critical needs to our citizens and the return on their investment.

Smaller bond packages with questions containing fewer projects provide better transparency. Additionally, it is important that all seven council members support any future capital bond measures.

Suzanne Klapp

•Infrastructure needs have been the focus of two bond programs that were not well-received by voters over the last few years. From your perspective should basic infrastructure costs be paid for through bond programs?

Suzanne Klapp

Suzanne Klapp

Yes. Long-term capital costs should be paid through long-term funding (bonds). Most people must borrow through a mortgage to buy a long-term asset (a home). If they had to save up to buy one from their yearly income, most people would never be a homeowner. It is a similar situation with critical city infrastructure. Bonding allows the city to provide for today’s needs through long-term borrowing.

If a city project is essentially meant to maintain an asset, then costs should be paid through the operating budget. If the infrastructure need is a long-term capital improvement, then it should be funded through bonding. Projects that have been approved by the voters in bond elections were for long-term projects (assets which can be depreciated over a number of years).

It is critically important that voters be aware of capital improvement projects and the bonding mechanism behind each one.  The public deserves the right to review, approve or deny bond referendums. I will always respect the will of the voters.

•Infrastructure improvement costs are abundant throughout the city of Scottsdale. If elected, what will you do to make sure infrastructure needs are met?

I will continue to support, and vote accordingly, to move the maximum dollars possible in end of the year savings from the operational budget into the capital budget. Before 2008, the city would move as much as $50 million from budget savings into capital. After that, city revenues dropped dramatically during the recession. Even after eliminating hundreds of city jobs and making other budget cuts, the city’s recent budgets have generated about 10-20 percent of the savings seen eight years ago.

That is not nearly enough to fund a capital budget which must fund needs totaling hundreds of millions of dollars. I do not support a sales tax increase to bring in revenues to fund capital items. I support eliminating the food tax, the most regressive tax in our city, which currently is helping support some of our capital needs.

A number of high dollar and long-term projects can only be achieved through bond questions placed on the ballot. Voters have indicated that they want to choose among infrastructure projects that should be funded by bonds that are paid through their property taxes. I support listing each capital project as an individual question on the ballot. Over the last six years, when projects are grouped into categories, voters have generally rejected everything in the group. They might have voted for some projects if given the opportunity to vote on each one separately.

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

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