Monday, July 15, 2019

Guest View: Jim Tripp ~ The Rest of the Iceberg. Part 2: Do State Land Department Site Specific Plans Help or Hurt K-12 Education Funding?

Bankruptcy is achieved by habitually incurring expenses in excess of revenues. Despite having been granted 9.3 million acres of Federal land to sell and lease in order to fund K-12 education, the Arizona State Land Department (ASLD) still cannot generate enough revenue to cover costs. How severe is the gap?

• Local school districts were recently forced to sue the state for adequate funding

• From 1966 to 2006, AZ dropped from 130% of the national average to 80% in K-12 education expenditures (Chart 12, p. 33)

• AZ currently now ranks 48th in K-12 education funding and many quality metrics (pp. 5, 6, 43, 44, 50, 53 in the above link)

How did ASLD manage to fail so miserably in its purpose? By getting the green light from the courts to seek maximum selling price for K-12 Trust Lands, regardless of K-12 funding liabilities incurred during rezoning for highest price. This legal policy has enriched real estate developers, but impoverished school districts.

Case in Point: the Annexation at Tangerine and Thornydale
The Site Specific Plan for the Tangerine and Thornydale annexation (page 75) says that 1,767 K-12 students will be added to the Marana School District if Oro Valley should annex and develop the land using the recommended zoning. I wondered why the Marana Unified School District (MUSC) would accept such a burden and, after multiple discussions with different officials, I got the answer: MUSC will get its ~$8500/student/year from the State, or ~$15 million/year, regardless of the selling price of this tract of land.

Where will this ~$15 million/year come from? Well, if the ~3100 houses in the plan pay a similar school tax to me in Sky Ranch, each household will contribute ~$1400/yr in school taxes, for a total of ~$4.3 million. That means, for this annexation to make financial sense for K-12 education, the revenue stream from the sale of the land needs to be ~$10.7 million/year.

What selling price is required to generate annual interest revenue of $10.7 million/year? First, we need to know a safe interest rate, so let’s try 2-4%. At 4% interest, the sale price would need to be $267 million, or ~$302,000/acre, given that the annex is 885 acres in size. At 2%, those figures have to double to $534 million dollars or ~$604,000/acre. Is anyone going to pay ~$300,000 to $600,000/acre for that land?

In my opinion, this is why AZ K-12 education funding is in crisis. The crisis will only deepen, and beneficiaries of the Trust will be more and more harmed, if Site Specific Plans like this are applied to the millions of acres of State Trust Land.

Solution: Future Revenue Stream Must Cover Future Expenses
When ASLD demands aggressive rezoning from a Town in order to achieve the highest selling price for a tract of State Trust Land, ASLD should be required by affected towns and school districts to demonstrate, from its appraisals and data on K-12 education costs, that the predicted future revenue stream will equal the predicted future expense stream. The farce of ASLD simply trumpeting their record-breaking revenue additions through land sales without revealing that it was accomplished by taking on more student expenses than the expected revenue and school tax stream will support has got to stop.

Parting Shot: Don’t Forget Water Liabilities Either
The 860,000 gallons/day required by this plan (p. 75, Water, 2nd paragraph) is another piece of “the rest of the iceberg.” What is going to happen with regard to AZ water demand if this pilot project goes Statewide, with Towns and developers eagerly adopting its aggressive rezoning and entitlement techniques? With Arzona currently under a Drought Contingency Plan, this is, in my opinion, another reason for Oro Valley to reject this pilot plan out of concern for the whole State, and take it up only after the overallocation of the Colorado has been dealt with.

The little-known “pilot plan” aspect of this annexation should have been discussed with the public and their elected officials before trying to push it through a struggling Town approaching buildout.

View the Site Specific Plan HERE
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Jim Tripp has a Bachelor’s degree in Biological Sciences from Cornell University and a Ph.D. in Molecular and Cellular Biology from Oregon State University. Prior to retirement, he was employed as a Federal Regulations Analyst for Wisconsin Power and Light and as a Research Scientist at UC Santa Cruz and Berkeley National Labs. He has over 30 scientific publications to his credit.

Monday, July 8, 2019

Guest View: Jim Tripp ~ The Rest of the Iceberg. Part 1: Fear Mongering by Solomon and Rodman

One June 17th, LOVE published a Guest View by Jim Tripp entitled, “The Tip of the Iceberg.” It included a wealth of previously unknown information on the proposed annexation of State Land at Tangerine and Thornydale including the blatant conflict of interest of two people involved in the project. If you missed it, you can read it HERE

We now present “The Rest of the Iceberg”


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What’s the rest of the iceberg?

Fear Mongering
Take a look at this video of Rodman and this video of Solomon warning the Oro Valley Town Council to rezone the Trust Land at Tangerine and Thornydale to the State’s satisfaction, or suffer the consequences at the hands of the town of Marana.

Rodman video at 31 seconds in:
“We should consider the fact that if we don’t do it, Marana will.  I mean, we’ve heard those words directly.”
Note his stress on the word directly.

Solomon video at 5 seconds in:
“This land will be developed, and the odds are if it’s developed outside of Oro Valley, it’s gonna be at a higher intensity, with less restrictions than what Oro Valley would have, and all that development is going to have an impact on Oro Valley...”
What facts does Solomon have to back up this opinion?

No Need to Fear: Marana Can’t Deliver Water
In a nutshell, I had two lengthy phone conversations with Marana Town Mayor Ed Honea to fact-check Marana’s interest in the Tangerine and Thornydale annexation. Honea said that Marana has no interest whatsoever in the land because Marana cannot deliver an adequate water supply. In contrast, Oro Valley can easily deliver water via two, 12” potable water mains. Honea told Satish Hiremath long ago that Oro Valley was welcome to annex the State Land.

Please visit this facebook post of mine to learn more.

Marana Town Finance Director, Yiannis Kalaitzidis, approached me as I was leaving a Marana Town meeting. He asked what had prompted me to ask a question related to K-12 population projections for Marana. I said that it was in connection with the proposed annexation at Tangerine & Thornydale. During the course of the conversation, he reiterated what Ed Honea had said: only Oro Valley can deliver water to the annex, and if Oro Valley doesn’t annex, it will be decades before Marana can get enough water there to make development economically possible.

So who are the powerful people in Marana who have said directly that Marana will snap up the land and intensely develop it, if Oro Valley doesn’t?

Please visit this facebook post as well.

No Need to Fear: Mayor Honea Respects the Sonoran Desert Conservation Plan
During the May 14, 2019 study session on the Marana 2040 General Plan, Mayor Honea fought hard for “low density 2-RAC” (no more than 2 residences per acre) in environmentally sensitive areas like Tangerine from I-10 to Twin Peaks. In defense of continuing the extensive use of “2-RAC” from the 2010 General Plan, rather than pitching it in the 2040 Plan, Honea said:
“When we developed the low density 2-RAC, we had buy-in from the Sonoran Desert Conservation Group, Carolyn Campbell, [and others]; they helped approve that. And you know why, when we developed everything along Twin Peaks, and we did 2-RAC, and we didn’t have the environmental community down our necks, is because they were involved in the process, for the 2-RAC...when you take that away, I can assure you, they will be back.”
You can watch it HERE (Time mark 51:23 on the video)

The Sonoran Desert Conservation Plan was a landmark achievement for Northwest Tucson. When was the last time you heard an Oro Valley Mayor or Council Person worry about the consequences of not honoring that plan? Does anyone in Oro Valley remember that plan? It was never mentioned in any of the meetings I’ve been to in Oro Valley. Ed Honea remembers, and he got the message the first time: don’t antagonize Dove Mountain area citizens with high intensity development.

Dove Mountain Marana citizens are environmentally conscious. In Sky Ranch and at The Preserve, we are fiercely protective of the low-density nature preserves on which we live. We love watching the bobcats, javelinas, coyotes, hawks, and owls that patrol the open spaces beyond our backyards, and we will fight to protect them.

Supply and Demand: Marana Has Plenty of Annex Opportunities Other Than This One
Figure 4, page 2-7 (below) of the current Marana 2040 General Plan shows an ocean of grey shaded land, especially adjacent to I-10 in the North. That’s all vacant and undeveloped land. Marana will have no need, for many decades to come, to force high intensity development at Tangerine and Thornydale.

You can view the Marana 2040 General Plan HERE

Oro Valley has the only game in town when it comes to annexation of the State Trust Land at Tangerine and Thornydale. There is no reason to fear competition from Marana.

Part 2 will be published next Monday.
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Jim Tripp has a Bachelor’s degree in Biological Sciences from Cornell University and a Ph.D. in Molecular and Cellular Biology from Oregon State University. Prior to retirement, he was employed as a Federal Regulations Analyst for Wisconsin Power and Light and as a Research Scientist at UC Santa Cruz and Berkeley National Labs. He has over 30 scientific publications to his credit.

Friday, June 28, 2019

LOVE returns on July 8th



For the month of July, we will be taking a “mini-vacation” and publishing only on Mondays.

We wish all our readers a Happy 4th of July!

Below is a list of Town events for the July 4th holiday.


More information is available HERE

Thursday, June 27, 2019

Behind the Scenes...

LOVE has recently begun receiving letters from residents who live along the golf courses complaining about the content of the Watchdog Reports. Just prior to this, Mike Zinkin shared with us a portion of an email that he received from an Oro Valley resident informing him that his Watchdog Reports, “will no longer go unnoticed nor unchallenged” and that “a significant number of very talented individuals have come forward in that regard.”

While LOVE has no issue with presenting opposing sides (and we have done so many times as long as the letters are respectful), we believe it is best when an individual presents their views as an individual and not as part of a cabal that has been formed to gang up on one person. We also believe that if a writer has a personal stake in the topic being discussed, that they should disclose this information upfront rather than presenting themselves as an objective bystander.

We find these truths to be…
What we have seen in the majority of letters submitted to LOVE (and in many of the letters submitted to the Explorer as well) is that the letter writer makes no mention of having a personal stake in the issue. But a little investigating on our part always unearths these truths.

LOVE received a letter from George and Sheila Lindsay (the same letter that was published in the Explorer last week). Their letter asserted that the Town needs to keep the golf courses because “the El Conquistador has hosted at least 13 charitable tournaments so far this fiscal year” and that these fundraisers “help the community.” And while no one would argue with hosting charitable events, the Lindsay’s made no mention of the fact that they have a personal stake in this issue as they own a home along the golf course.

The elephant in the letter
While Edward Cooke, whose letter we published yesterday, did sign his name as being the “former president of the Canada Hills Master Association” he did not state what his current connection was to the golf courses…which is that his home is adjacent to one of them. His letter discussed loss of tax revenue, winter visitors no longer visiting Oro Valley for golf, and that restaurants, hotels, and OV Marketplace “will suffer greatly” and “people will lose their jobs” should the golf courses close.

The burden of proof for those assertions is on the writer. Is there any evidence that when golf courses closed in other cities/towns, that it led to businesses and hotels suffering greatly, which in turn, led to people losing their jobs?

It’s fine to have concerns about all of those things, but we found it suspicious that a person who owns a home along the golf course would just happen to not mention anything in his letter about concerns of loss of property value. It was the “elephant in the letter” that no one was supposed to notice.

The difference between Naranja Park and the Golf Courses
Mr. Cooke also asked why spending tax dollars on Naranja Park was any different from spending tax dollars on the golf courses. He wrote:
“Why is the O.V. Council spending money ($1.350M) on Naranja Park when the residents of O.V have voted the park down on numerous occasions? How many dollars does Naranja Park generate for the town? How much are we spending to maintain this park annually?”
Our response is that Naranja Park is free and available to every citizen of Oro Valley. This is not the case for the 18-hole dedicated golf course for the golf members. Residents have to pay a “daily fee” to use the golf courses if they are not a golf club member. Both Naranja Park and the Aquatic Center also host events that bring families and out-of-towners into Oro Valley where they stay at our hotels (bed tax revenue) and eat in our restaurants and shop in our stores (sales tax revenues). This is something that an 18-hole dedicated golf course does not do. There is a big difference between a public park and a private golf course.

Remember…Golf was at the bottom of the list
LOVE believes that the majority of the 43,000 Oro Valley residents think a town-owned golf course is a bad idea. That’s why they came out in great numbers to speak against it when it was first brought to the public’s attention in December 2014, and have continued speaking against it in numerous LOVE Guest Views and letters to the editor. It’s also why golf placed 33 out of 34 amenities that Oro Valley residents requested in the Town-sponsored Parks and Recreation Survey in June 2014.

 LOVE Editor

Wednesday, June 26, 2019

Guest View-Edward Cooke: "Get The Facts On The Golf Course"

We received the following email from an individual who lives on Carmel Pointe Drive along the golf course, though he does not state such in his email. 

LOVE is based on full-disclosure and honesty. 

To us this means that people who have a self interest in the result of an event should disclose such in their communications to us.  Submitting emails to us that pretend to  be altruistic, when they are indeed self-serving is, indeed, wrong.

We're publishing this as an illustration of what is being "tossed around" out there.
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"LOVE needs to be more fair with their articles regarding the Oro Valley golf courses.

I really believe that all the Oro Valley Parks and Recreation financials need to be included in your articles, not just the lambasting of the golf courses. You would be surprised how many people I have spoken to that have no idea how much money Oro Valley is losing on the Aquatic Center.

Why is the Oro Valley Council spending money ($1.350M) on Naranja Park when the residents of Oro Valley have voted the park down on numerous occasions? How many dollars does Naranja Park generate for the town? How much are we spending to maintain this park annually?

[Comments derogatory to the writer of a previous LOVE guest view were removed. We do not publish personal attacks].  I ask that all Oro Valley residents ... get the true facts and to decide for themselves what the actual numbers are. You will be very surprised.

Lastly, remember if the golf courses are shutdown the town of Oro Valley will suffer substantial tax revenue losses. Winter visitors who rent the golf villas or private homes will no longer come to Oro Valley for their golf. Restaurants, hotels, the Oro Valley Marketplace will suffer greatly. People will lose their jobs. Is this what we want to happen?

Winter visitors are not going to come to Oro Valley to walk on linear parks, bicycle trails left to grow as natural vegetation, surrounded by houses. We have sufficient walking trails all through Oro Valley including Catalina State Park.

The golf courses are now producing revenue. Let them continue. Instead of denigrating golf, work to keep the junior golf, First Tee viable for our young people and keep Oro Valley Green.

I sincerely hope the new mayor and council consider the ramifications closure of the golf courses will cause the community.

Respectfully submitted,

Edward Cooke
Former president Canada Hills Master Association"

Monday, June 24, 2019

The Watchdog Report: April 2019 Community Center Financials

The Community Center Fund (CCF) ended April 2019 with a positive balance of $698,301. Although a positive balance of this magnitude is a good sign, there are a lot of promised obligations that need to be fulfilled…and they’re not being fulfilled.

What happened to ADA compliance?
We have owned this property since May 2015 and it is still not ADA compliant. Why isn’t the Town Manager funding an elevator for the Community Center? Does anyone care about our citizens who are disabled and currently have to enter the building through the loading dock? What happened to the funding for ADA and Code Compliance and Life Safety Issues that was shown during the Power Point presentation in December 2014?
ADA and Code Compliance Life Safety Issues

FY 2014/15         $381,000
FY 2015/16         $445,000
FY 2016/17         $69,000
FY 2017/18         $142,000
FY 2018/19         $106,000
TOTAL              $1,143,000
Greg Caton (Town Manager in 2014) promised that between FY 2014/15 and FY 2018/19 that the Town would spend $1,143,000 to remedy these issues. Fiscal year 2018/19 ends on June 30th and to-date the Town has spent ZERO on ADA compliance.

What happened to paying back the $1.2 million dollar loan?
In 2015 the Town Council borrowed $1.2M from the General Fund to start the Community Center Fund with a promise to pay back $120,000 per year for 10 years. There has been no transfer of the promised annual $120,000 from the CCF to the General Fund.

Gains and Losses
Troon lost $85,220 in April 2019, bringing their losses to date to $1,267,303.

The Overlook lost $2,232 in April bringing its total losses so far this fiscal year to $89,679. Since the Overlook opened in 2015 it has lost $556,141. Of interest is that four years into this endeavor they are still losing more than what they've budgeted to lose. Budgeted losses YTD were $58,712. Actual losses YTD are $89,679. (Difference of $30,967).

The Town part of the investment (fitness, recreation, swimming) made a little over $125,000 as of April 2019. There is nothing wrong with the Community Center part of the investment; it is golf that continues to be a financial drain on the Town. So far this fiscal year your sales tax revenues dedicated to the Community Center and Golf amount to $2,033,576 (as of April 2019).

Looking ahead
I recently submitted a Freedom of Information request asking for the number of employees assigned to maintain the golf courses, including supervisors and mechanics, and the total water usage for 36 holes (either in gallons or acre feet). The Town responded that they did not have the requested documents because these items are not broken down individually. I’m not sure if this is stonewalling or irresponsible management. How can the Town not know how much water is utilized or how many employees are utilized for golf maintenance? I am trying again with a revised submittal.

I am currently working on a plan for an 18-hole, strictly municipal model for golf. Town Manager, Mary Jacobs, seems to be leaning towards the 36-hole model if the adjacent HOA’s supplement the Town via increased HOA dues. The recently passed budget still includes the Overlook and the 36-hole model. One wonders what it will take to get the Town Manager to understand that the current model for golf is not working.
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Mike Zinkin has a Bachelor’s degree in history and government from the University of Arizona and a Master’s degree in Social and Philosophical Foundations of Education from California State University, Northridge. He was a commissioned ensign in the United States Navy Reserve. He was an Air Traffic Controller for 30 years. He and his wife moved to Oro Valley in 1998. Mike served on the Oro Valley Development Review Board from 2005-2009 and the Board of Adjustment from 2011-2012. He served on the Town Council from 2012-2016 during which time he was named a Fellow for the National League of Cities University, he was a member of the National League of Cities Steering Committee for Community and Economic Development, and a member of the Arizona League of Cities Budget and Economic Development Committee.

Tuesday, June 18, 2019

More Oro Valley Stores Closing

Store closings are a nationwide problem
LOVE has noted that stores are closing in Oro Valley. Empty storefronts are not just an Oro Valley problem. It's a nationwide problem. There are lots of reasons for it.

Recent Oro Valley retail store closings, like the closing of Platinum Fitness in April, or now the closing of the Alfonso's Olive Oil and Balsamic store, Rigazzi's and a cleaners in the Trader Joe's Mall are gaining attention on Nextdoor.com.

Nextdoor.com readers speculate on the causes
A recent comment that was posted on Nextdoor.com spawned an  interesting conversation.

The originator of the posting (see panel) suggested that the council get involved in retaining business. Others responded, citing host of reasons why stores close including:
  • The seasonal transient nature of some Oro Valley residents
  • High lease rates (which was the cause of the closing of Platinum Fitness)
  • Oro Valley's higher than competing communities sales tax rate
  • The rise of online shopping
Store closings are really the problem of the store owner
It's far too easy to point to outside forces causing a retail business to fail. Our experience in working with retailers for 60 plus years has taught us that there are really six possible causes of a store's failure. Any one or a combination of these can do a store in!
  • There wasn't a market for the product the retailer sells in first place;
  • The store is just another "me too" business;
  • Poor location;
  • The retailer failed to bring sufficient capital to weather the startup time it takes to get a business established;
  • The economic formula for making the business a success just wasn't there. For example, if the rent is going to be too much in relation to the business that will be done then the store is simply not financially feasible; and
  • Store management simply did not know how to operate the store efficiently. For example, they buy too much inventory or too much of the wrong inventory. So, they have to mark down the product to get rid of it or customers walk out because what they want isn't there.
Can the council fix this problem?
Some Nextdoor.com commenters suggested that the town council do something to fix this problem. The only factor that the council controls is the sales tax. Reducing the sales tax is hard to do until the council fixes the hemorrhaging losses of the town owned country club community center.  We will learn more about the options and the possible financial impact of them at tomorrow's regular council meeting.

More real Oro Valley jobs paying real wages can pave the way to retail store success
The hope for Oro Valley is that Oro Valley Economic Development Director JJ Johnston's five year comprehensive economic development strategy will work. As we have previously written, it calls for bringing in non retail businesses to bolster real employment in our community. The UA Veterinary School is an example of this. Once the town has more "real jobs that pay real wages" the town will have more people working here full-time who will need and who will visit retail stores.
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