Scottsdale pursues capital improvements as matching funds may materialize

Scottsdale officials are now set on developing a master plan looking at how the future of Vista Del Camino Park will unfold in the years to come. (Independent Newsmedia/Terrance Thornton)

Despite the confirmation that matching funds may never materialize, Scottsdale City Council approved both General Fund and transportation fund contingency transfers totaling $10,373,013 to begin work on five capital improvement projects.

Scottsdale City Council Tuesday, Oct. 17 — by a vote of 6 to 1 — approved five separate resolutions focused on preparing planning documents to potentially thwart flood waters from ravaging different corners of the municipality and the contemplation of an east and west connection along Happy Valley Road.

Scottsdale Councilwoman Kathy Littlefield was the only dissenting vote citing her concerns no other government agency — in particular Maricopa County and its flood control district — have allocated dollars to any of the pursued Scottsdale projects.

The resolutions and subsequent project approvals came from recommendations from the capital improvement plan subcommittee, which is comprised of Scottsdale Vice Mayor Virginia Korte and councilmembers Guy Phillips and David Smith.

The Scottsdale Council Capital Improvement Plan Subcommittee is charged with presenting the larger governing body with both a recommendation for a list of priority projects to address infrastructure needs this coming fiscal year and, most importantly, marching orders for the next five years.

Back in March, the projected capital improvement budget heading into fiscal year 2017-18 was approximately $37.5 million of which the majority of those dollars were earmarked toward two projects: a renovation of the Vista Del Camino Park and subsequent facilities at an estimated cost of $17.5 million; and a Granite Reef Watershed study to the tune of $5.2 million.

The current five-year estimate for staff pursued projects totals $156.3 million, city officials reported back in March.

City officials say there is about $25 million — including $16.4 million from the General Fund and about $9.9 million in the transportation fund — in undesignated, unreserved taxpayer dollars.

Following the contingency transfers approved Oct. 17, it appears the city is left with about $14.5 million in unreserved taxpayer dollars, which is aside from its General Fund reserve balance.

The five projects approved for funding are:

  • A $2 million General Fund transfer for what city officials have coined the “Rawhide Wash Flood Control COS.”
  • A $1 million General Fund transfer for what city officials have coined the “Reata Wash Flood Control Project.”
  • A $2,977,728 transportation fund transfer for the east and west connection between Pima and Alma School roads along Happy Valley Road in north Scottsdale.
  • A $4,395,285 modification to the approved budget for the capital project along Pima Road to be paid for through the usage of additional transportation funds.
  • City staff is now approved to redefine the scope of the Vista Del Camino Park and Indian Wash Project, which will now include a master planning process.

“One of the first things they (the council subcommittee) did was review the 2017-18 CIP budget. There were some minor adjustments made to that budget during the review process,” Scottsdale Treasurer Jeff Nichols said during the Oct. 17 public hearing.

“It was clear the CIP subcommittee wants us to look outside of the box so-to-speak for funding sources but also review best management practices by other municipalities. Bottom line, my opinion, there is no silver bullet. I believe the amount of infrastructure we will be looking at is significant.”

Mr. Nichols says the approved budget transfers were meant for projects that would likely come with matching funds from Maricopa County and, in some cases, neighboring municipalities that would also benefit from the capital improvements.

“We are exploring matching funds and their impact,” he said of the projects identified for budget transfer.

“We say this because we have an arterial lifecycle program and we need to come up with about $71 million to get a $172 million match from some Prop. 400 funds. We also have some significant flood control projects that have some fairly large matching funds associated with them as well.”

Jeff Nichols

Proposition 400 dollars are derived through a half-cent transportation sales tax in Maricopa County that was first approved by voters in 1985.

Mr. Nichols contends there are 47 different policies guiding city officials through the annual budgeting process for capital projects to be pursued within city limits.

“We are looking for the best uses of General and transportation fund balances — the undesignated and unreserved balances,” he said. “We will also have a communication program for the citizens to make them better aware of the improvements that are being done in their communities — we are looking at the longterm capital needs.”

While certain capital improvement projects failed to gain voter support in both 2013 and 2015, Mr. Nichols explains major local economic centers of activity are seeking improvements of their own.

“We brought all of these requests together and to include other emerging needs — the Scottsdale mall, stadium improvements, parking lot solution in the north eastern part of the city where we have some fairly large events as the state land gets ready to sell or lease their land we need to find some alternatives,” he said.

“We want a policy from council eventually to say what do we want the streets of Scottsdale to look like. The items pending discussion moving forward, we are reviewing current assets and depreciation and we are going to do this by asset type and funding source.”

Mr. Nichols told the local governing board the financial picture of longterm capital needs is still coming into focus.

“We are figuring out what the total needs are of the capital needs in both the General and transportation funds in particular,” he said. “What is our current ability to deliver on those needs and what the deficit is and how do we approach that?”

No matching funds?

Each member of Scottsdale City Council lauds the effort of the city staff in coming up with a workable capital improvement plan without bond dollars, but Councilwoman Littlefield says the flood control resolutions have her questioning the logic of the budget transfers.

She says she has met with county officials, and they say dollars aren’t in the coffers for these efforts — and they are not included in the county’s five-year CIP plan.

Kathy Littlefield

“I have a problem voting for the $3 million from the General Fund balance for these two projects,” she said during the public hearing, citing a recent conversation both her and councilman Phillips attended.

“They have created, for me, some serious doubts of these projects right now — maybe not later, but now. Our current plans may conflict with current regulations, requirements and needs from FEMA,” she said.

“There is no matching money. These are people who specialize full-time in water and flood control issues — and they understand them. These projects will be extremely expensive and I don’t believe the city has the funding to implement them without the additional debt.”

Turns out, she was right.

“It is absolutely a true statement the county has not allocated any funding in their five-year CIP for either of these projects,” said Dan Worth, Scottsdale Public Works director, but noted both community interest in each project pursued and county officials’ desire to see the flood control projects come to fruition.

“Because of the history and the sensitivity of the issue, the city wanted to manage that process ourselves in a very deliberate manner. They (Maricopa County officials) do feel that it will score highly and potentially be included in their next CIP. That is true, they have not approved funding.”

But Mr. Worth did point out that the Federal Emergency Management Association — or FEMA — process typically dictates a municipality submit its plans to gain approval for a given flood control project.

“We absolutely are going to comply with all FEMA rules and regulations as we go forward,” he explained. “It is a FEMA process and we will get FEMA’s approval.”

Matching funds or not, Scottsdale Vice Mayor Virginia Korte pointed out these discussions are vital for the city of Scottsdale.

Virginia Korte

“There have been great discussions and more great discussions to come as we look at all of our needs and whittle-down what this community can absorb in terms of capital improvement programs and some kind of additional bonding,” she said during the public hearing.

“I know our hard work will begin in January. I believe we will have our recommendations to council in April or May.”

Meanwhile, Councilman Smith says he believes the funds will materialize — as they do with matching funds.

“All of these have given matching funding from various other funding sources,” he said.

“So, for ourselves and the citizens, we are getting the best bang for their buck. The money that is left there — I think Mr. Worth said there was about $16 million left in General Fund unreserved fund balance and another $9 million in the transportation fund — about $25 million between the two of them. These monies are intended to be swept into the CIP project bucket.”

Councilman Smith says he would like for city council to devise a true policy on how to handle undesignated, unreserved General Fund dollars.

“I urge, at some point in time, for the council to affirmatively say what to do with the monies that are being swept out of there,” he said. “It hangs in limbo until council decides what to with them in the future.”

Mr. Worth says if the city were to approve funding for certain road projects, then matching dollars — in this case the Maricopa Association of Governments — would likely come back to the table.

“Happy Valley Road had been in our five year CIP, but it is now out of our five-year CIP. This is a project where we intended to use proceeds from a bond question that failed in 2015,” he explained.

“We currently don’t have the match but there is a lot of interest in getting this project done. If you were to approve this transfer we would be able to talk to MAG about bringing their funding forward again.”

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

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