Monday, April 30, 2018

Guest View: Mike Zinkin ~ The $6 Million Dollar Bond

The “turn-key” Community Center needs another $6 MM in taxpayer funds
In December 2014, Town Manager, Greg Caton, plus Mayor Hiremath, and Councilmembers Hornat, Snider, and Waters insisted that the Community Center and Golf course purchase was a great deal because it was a “turn-key” operation costing only $1 million dollars and that no debt service would be required. Turns out that this has become just another one of their lies/broken promises.

Through a series of email exchanges with the Town, I recently learned that Town Manager, Mary Jacobs is recommending a $6 MM bond for Community Center expenses, with half to be spent in FY 2018/19 and half in FY 2019/20.

According to Finance Director, Stacey Lemos, the actual cost for this bond, assuming an interest rate of 5% over 20 years will total an estimated $8.7 million dollars.

A Budget Study session will be held on Wednesday, May 2nd at 3 PM in Town Council Chambers. Will the mayor and council consider approving a $6 million bond in order to save golf? We expect that they will since none of their previous efforts to finance the Community Center and Golf Courses have been successful.

The Repeated Lies and Broken Promises of the Town Council

• They promised that the half-cent sales tax increase would cover ALL Community Center costs. It hasn’t.

• They asserted that there would be no debt service. Yet, here we are, three years later, discussing a $6 MM bond for Community Center/Golf expenses.

• They lied when they said that only $1.2 MM would be taken from the General Fund Contingency to jump-start the Community Center Fund. As you will recall, they had to transfer another $350,000 from the General Fund last year to meet Community Center expenses.

• They lied when they promised they would pay back the $1.2 MM to the General Fund with $120,000 a year for the next 10 years.

• They spent $50,000 of taxpayer money on a Golf Study and then completely ignored the recommendations.

Mary Jacobs email stated the following:
“I point you to page iv of the Town Manager’s budget message that outlines how the recommended capital expenditure is being budgeted in FY 18/19.

In addition, the Recommended Budget includes half of the projected $6 million in total planned funding for capital improvements at the Community Center building as well as irrigation system replacement, turf reduction and other improvements on the Canada and Conquistador 18-hole golf courses. The expenditure will be financed via the issuance of a 20 year bond, and debt service will be repaid through the Capital Fund…..it’s a $6 million bond with HALF of it expected to be expended in 18/19, and HALF expended in 19/20.” (emphasis added)

Page 228 of the TMRB
Town Manager Jacobs has requested $3.6 MM for golf course repairs and $2.4 MM in Community Center improvements (TOTAL $6 MM) spread over two years and financed with a 20-year bond

The following information was obtained from Page 228 of the Town Manager’s Recommended Budget (TMRB).

COMMUNITY CENTER (CC) BOND FUNDED IMPROVEMENTS

                                                                     FY18/19                FY19/20                  TOTAL
Community Center Improvements              $1,200,000            $1,200,000              $2,400,000
Golf Course Irrigation Replacement           $1,800,000            $1,800,000              $3,600,000
TOTAL CC BOND IMPROVEMENTS         $3,000,000            $3,000,000              $6,000,000

The Town Council’s Community Center financing plan did not work
The additional half cent sales tax was supposed to offset ALL expenses for the Community Center, including golf, tennis, and the Community Center building. Instead, all of the sales tax revenue is going down the drain for golf. As such, there have been limited funds for capital improvements which is why the Town now wants to bond $3M in the 2018/19 budget and another $3M in the 2019/2020 budget.

How many more millions of taxpayer dollars are they going to spend on this endeavor before they admit that they made a mistake in purchasing the El Con Community Center and Golf Courses?
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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.