Archive for February 1st, 2010

1st February
2010
written by Arizona Kid
Our view: Survey costing $500,000 may save Pima County much in long run

Manhole contract isn’t the waste it appears to be

    It turns out that Pima County’s decision to award a $500,000 contract to a local firm to find and inspect manholes isn’t the boondoggle it seems to be.

    It’s not merely a search for AWOL manholes. It’s a strategic move that in most ways makes sense to us.

    Here’s the background: The county Board of Supervisors on Tuesday accepted a recommendation from County Administrator Chuck Huckelberry to hire CPE Consultants, headed by Raul Piña, to complete the manhole survey, which has been under way since 2001. Piña was the head of the Tetra Tech when it received the 2001 manhole contract and two extensions worth $4.3 million. Ten percent of the work is still incomplete.

    We wondered, how do you lose track of manholes? Shouldn’t the county have been keeping track of them all along?

    The reason, said Huckelberry, is that parts of the sewer system date from the first decade of the 20th century and it has grown “topsy-turvy over time.” Further, the county took over the city of Tucson’s sewer system in 1979, he said, and the city’s records were incomplete.

    Beyond that, some manholes in “wash environments get covered by sediment and silt over time. It’s like looking for buried treasure,” he said.

    Why pay $500,000 to the team that couldn’t get the work finished under previous contracts?

    It’s not like that, Huckelberry said. The $4.3 million was an estimate of how much full inventory would cost. “We put a financial limit on the contract, and once you reach that the contract’s over. But it was only an estimate.”

    But why is finding manholes so expensive?

    It’s about much more than simply locating manholes, and the cost per manhole works out to about $67, Huckelberry said in a memo to the supervisors. The consultants also visually inspect for potential blockages and to project possible storm-water inflow through the manhole. They do a “comprehensive, digitally recorded” assessment of the condition of the entire structure to rank how soon and how much work must be done to bring it up to par. They also input GPS coordinates and photograph the manhole inside and out.

    The work still seems expensive, and Republican Supervisors Ann Day and Ray Carroll argued that it should be done by county wastewater staff.

    The director of the Regional Wastewater Department, Michael Gritzuk, told the supervisors Tuesday that the department employs no survey staff and lacks “the sophisticated GPS equipment” needed to do the work.

    Democratic Supervisor Sharon Bronson told us that the process would be delayed at least 18 months and cost much more if the department had to gear up to do the work, including hiring, training and capital costs.

    But money is tight, and we wanted to know the reason for finishing the survey now. What’s the big rush?

    In fact, the survey’s been “under way continuously since 2001,” Huckelberry wrote in the memo.

    He also wrote that since the survey began, the consultants have “collected an asset database of 66,771 sewer conveyance structures … covering an estimated 500-square-mile area.”

    During that time, he wrote, “a total of 2,307 maintenance work orders” were completed “to resolve issues ranging from vandalism, grease problems, construction issues, wildcat dumping and partial line blockages.”

    As a result of the infrastructure survey, he said, the number of sewage overflows has been reduced from 245 in 1999 to 50 in 2009.

    Bronson called the project “an excellent strategic cost-avoidance measure because it allows us to remedy situations that could become quite costly at a very minimum expenditure.” She was referring to environmental enforcement fines of up to $25,000 a day triggered by overflows.

    It’s about more than manholes, Huckelberry said. The Wastewater Department is required by the Environmental Protection Agency to develop a “Capacity Management Maintenance System.”

    “This requires us to have hydraulic models of the system that talks about, if you add sewage at point A, does it get to the treatment plant or does it cause a constriction at point B,” he said. “You need very precise information in order to construct that.”

    This survey is providing information that will be valuable as the Wastewater Department assesses its capacity to take on growth.

    We agree that the work is necessary. We trust that the department will hang on to the records, so that it needn’t be repeated ever again.

    Arizona Daily Star

    1st February
    2010
    written by Arizona Kid

    Private developers and neighborhood activists may seem like unlikely allies, but some in Tucson are leading an effort to make it easier for developers to get moving on projects downtown.

    We hope they are successful. Tucson’s land-use code is notoriously byzantine. The city has commissioned consultants to rework it, top to bottom, but that’s a project that won’t come up for air until the end of the year.

    In the meantime, members of the appointed Land Use Code Committee are seeking to fast-track some changes to get the land-use code out of developers’ way.

    Jim Campbell, whose Oasis Tucson development company is planning student housing, retail and more on land southeast of the Fourth Avenue underpass downtown, is one of the people taking the lead.

    The other is Ruth Beeker, president of the Miramonte Neighborhood Association, who has shown herself to be a fierce advocate for neighborhood preservation.

    But, as the two wrote in a letter to the City Council, during the committee’s search for quick fixes over the last few months, “we have found that our developers are truly neighborhood activists and our neighborhood activists are actually closet developers.”

    Beeker told us that activists have understood for some years that “the best protection from undesired development would be to identify appropriate locations for the extra-dense developments that would be needed by the university for housing.”

    She said “getting downtown going” and re-establishing commercial businesses along Broadway and Speedway would also benefit neighborhoods.

    Also, she said, “Downtown and the corridors along the streetcar route could absorb the need for student housing and take pressure off the neighborhoods.”

    As Campbell and Beeker noted in their letter to the council, builders widely regard the city’s land-use code as an often-insurmountable impediment to new projects, while neighborhoods embrace it as a protection against inappropriate development.

    Still, committee members found plenty of common ground.

    They wrote that they agreed that “the current land-use code is appropriate where we want to preserve neighborhood cores, historical zones and natural features such as significant riparian areas and hillsides. However, when we want to focus development in appropriate locations, aspects of the code present a serious deterrent.”

    The committee shared its ideas with the council last week. The council asked the committee to work with the city’s Planning and Development Department to fine-tune the proposals, run them through the city’s Planning Commission and bring them back to the council in 45 days.

    “What we presented was an optional overlay for downtown,” Campbell told us. “A bunch of this stuff in the land-use code is just not important for downtown. Parking and landscaping requirements in the core part of downtown get in the way when you’re trying to get a building up, occupied and businesses going.”

    Because the overlay would be optional, he said, a builder who prefers to go forward using the regular land-use code could do so.

    The proposal involves several phases: first, the suspension of certain code requirements in the downtown core; then “if we can get this to work downtown, we’d pick the best of the rules, and extend the overlay to greater downtown – Fourth Avenue and the warehouse district – then to the infill incentive district along Stone and Oracle, and last to Speedway, Broadway and 22nd Street to try to get the arterials moving,” Campbell said.

    Mayor Bob Walkup told us he supports the idea of quick, surgical fixes to the land-use code.

    “Now that we’re moving ahead with the modern streetcar, everybody’s saying, ‘Boy, let’s get going. The land-use and building codes that aren’t consistent with what we’re doing downtown have to be fixed.’ ”

    Campbell said he and Beeker are optimistic about the proposal’s future.

    “The issue is going to be how to legally draft things, then getting through the planning commission, then the mayor and council, that process,” Campbell said. “As far as the developers and the neighborhoods being on the same page, we’re on the same page.”

    We hope the land-use committee’s work goes forward smoothly and quickly.

    When the economy begins to show signs of brightening and as work on the modern streetcar begins, it’s likely that more builders and private investors will be willing to take a chance on Tucson.

    The city must not trip them up.

    Arizona Daily Star

    1st February
    2010
    written by Arizona Kid

    Is Tucson ready for a strong mayor to guide it?

    And it’s attracting surprising allies, including the head of the county Democratic Party and a local Tea Party organizer.

    Under that system, the mayor would operate in much the same way a governor does. Since you wouldn’t expect Barack Obama to implement a vision with George W. Bush appointees, the mayor would appoint department directors and propose a city budget. The mayor would also have some form of veto authority.

    Currently, while the mayor ostensibly has a bully pulpit, he’s just one vote of seven. And he has no say at all in firing the city manager, who acts as the city’s chief executive.

    While some say the problem is with the current personalities, others believe it’s the structure itself that prevents the incumbents from being fully effective.

    Jeff Rogers, the Pima County Democratic chairman, said he hopes council members will put a plan on the November ballot.

    “Lovable Bob Walkup is a wonderful ribbon cutter and he’s good at being the face of Tucson – because that’s what the job entails – but he’s not the chief executive of the city.” Insisting it’s a system designed for the mayor and council to be figureheads, Rogers added it’s “just anti-democratic” that voters have no say in the person who actually runs day-to-day operations.

    Meanwhile, the Tea Party sent out a survey asking its members about moving to a strong-mayor system.

    Tea Party organizer Trent Humphries contends the existing system is “why this city is so dysfunctional.”

    Humphries acknowledges one of the reasons a council-manager system evolved in the first place was to clamp down on Chicago-style political machines. But it’s not like the current system has been a boon, he said. “And at least city voters would have a chance to really change things up.”

    The concept isn’t new. It was discussed in 1982 but never made it to the ballot. Voters in 1991 rejected dueling propositions that would have chucked the city’s council-manager system, although backers chalked the loss up to confusion between the two choices.

    There is some risk that could happen again, with the Southern Arizona Leadership Council shopping around a different package of charter changes for the November election that re-define powers without totally overhauling the system.

    Among their changes: full-time mayor and council, eliminating staggered terms, combining the city election with state and national elections, expanding the number of wards and modifying the manager’s powers.

    The leadership council President Ron Shoopman said there were discussions about a strong-mayor system. “That comes with good and bad, but changing to strong mayor is a major, radical departure from what we have now. Our thinking was, we understand the system we have and if we can just adjust it to be more effective, that might be the best place to start.”

    But Shoopman said he does think voters should be asked for one charter-change package. “Anything’s on the table and we’re open to sitting down with other groups, but it’s a busy ballot already statewide, and we could end up negating two efforts and not getting anything.”

    Don’t look for guidance from Tucson mayors.

    Tom Volgy, a former Democratic mayor who teaches political science at the University of Arizona, said he’s all for it. “It’s the equivalent of voting for president and then separately for Congress. We would never allow Congress to pick our president, but we allow a council to pick the most powerful person in the city.”

    He said the big worry he’s heard is that voters will elect a mayor without the qualifications to run the city. “But that doesn’t make much sense if you’ll then trust the public to elect a City Council who then appoint a city manager.”

    But former Mayor George Miller, also a Democrat, is on the other side. “The mayor right now has the power to lead. The common word you hear now about the city as well as the state Legislature, is that it’s ‘dysfunctional.’ I understand that, but it’s not the way government is set up. It’s who’s governing.”

    The council is at fault, he said, for letting the manager usurp too much power or not giving the manager clear direction. “If they can’t get four votes to tell him what they want, then the city manager has to tell them. From talking to a couple of them, I get the impression they don’t even talk to each other.”

    Walkup, the incumbent Republican, meanwhile, said he’s worried a strong mayor would center too much power in one place. He’d be interested in exploring a hybrid – more of a strong mayor, strong city manager working together.

    Looking for guidance from the outside is a bit of a jumble. Although a majority of the biggest 100 cities in the U.S. have embraced strong mayor, Arizona hasn’t followed that lead.

    Adrian Kwiatkowski, who heads the California-based Strong Mayor-Council Institute, said that’s not surprising, since newer, West Coast cities adopted a city-manager form of government to try to limit the corruption that had taken hold in their more established sisters in the East.

    He said the average voter thinks the mayor is in charge. “But what you’ve got in Tucson is an unelected official who’s not answerable to the voters, and what that means is no one is held directly accountable. Everyone’s in charge, and no one’s in charge. Everyone’s accountable, but no one’s accountable.”

    Kwiatkowski, who was heavily involved in the 2004 effort that pushed San Diego to a strong-mayor system, said city managers are more likely to cut backroom deals in an effort to maintain their positions. Managers are usually not from the community, only stay a few years, and almost always make more money than mayors.

    Kwiatkowski said San Diego, previously rocked by management scandals, works better under the new system, which was passed for a five-year trial period that voters are now being asked to make permanent.

    But Norma Damashek, chapter president of the League of Women Voters in San Diego, said she needs more time to decide. “It’s a double-edged sword,” she said. The mayor rarely attends council meetings now, and is less accessible to the public, while business interests continue to have access.

    And she said the system is set up to allow the mayor to play hardball with his Democratic council. Since he controls the departments, she said, there’s nothing to say he can’t shift a particular district project down the priority list, or slow down the information when a council member asks for a report.

    “A city manager has to please everybody. The mayor does not have to please the City Council,” she said.

    The tanking economy hasn’t allowed city voters to see how it would work under normal conditions, she said, so she’s pushing to continue the trial period.

    Larry Hecker, an attorney active in downtown Tucson politics, said even though a similar change failed before, it might be worth exploring again. On the one hand, he said, a strong executive branch works well at other levels. On the other hand, he said, “I’d hate to discourage a mayoral candidate from running because he or she doesn’t have the administrative or managerial skills to be a good bureaucrat.”

    After pondering whether “good bureaucrat” is an oxymoron, he continued, “I honestly don’t know where I am on the issue, but I look forward to hearing the arguments.”

    Contact reporter Rhonda Bodfield at rbodfield@azstarnet.com or 573-4243

    1st February
    2010
    written by madge

    41. Comment by Steve F. (LarryContrary) — January 17,2010 @ 1:32PM
    Ratings:   -2 +7
    Is there a mastermind behind this disaster? Yes: Larry Hecker.
    He is the go-to “older statesman” trusted by Tucson’s ultra-liberal, shadow government (the George Miller-Tom Volgy “su dinero es mi denero” group). Mr. Shadow is on Doug Kennedy’s corrupt board, then he isn’t. Only the shadow knows.
    Larry Hecker raises political money from lawyers and unions for every liberal city council member, often serving as treasurer, then yanks their strings. The money raising doesn’t stop after elections.
    He’s joined at the hip with another shadow, Dan Eckstrom and his south tucson gestapo. Hecker’s chaired TREO, the largest cloth organization in Tucson. He’s on a first kiss basis with Janet Napalitano, Nina Trashoff, Regina Romero, Karin Uhlich, and Gabby Giffy. He’s a first line of defense for the UofA’s troughs.
    No one has had more bone-headed, corrupt notions about Rio Nuevo than LARRY HECKER. Most amazing, he currently chairs the very organization charged with managing our downtown redevelopment, the DTP. Of course, he defends his decision to spend $300,000 a year on salaries, bonuses, benefits, etc. for just a few political appointees as an essential use of our (his) money.
    THIS VAMPIRE NEEDS TO PART WAYS WITH OUR MONEY AND OUR PROPERTY!
    Report this comment
    42. Comment by Steve F. (LarryContrary) — January 17,2010 @ 1:47PM
    Ratings:   -0 +8
    Has there been a critical accomplice to Larry Hecker? Yes: The Arizona Daily Star. It’s publisher, John Humenick, sits on Larry Hecker’s board.
    Rob Odel is allowed to run the occassional poorly researched article. Any other big city paper would have hounded Hecker for a professional audit of Rio Nuevo, with daily headlines screaming in ever larger type size: HECKER MACHINE REFUSES TO COME CLEAN!!
    Their editorial board and cartoonist would have run multiple rants every single day.
    But John Humenick? Turn on a board where he serves personally? What are you an imbecile?
    Report this comment

    1st February
    2010
    written by Arizona Kid

    PHOENIX – Ignoring threats by a company to pack up and leave, a House panel voted late Tuesday to overturn the Arizona Corporation Commission’s renewable-energy mandate on utilities.

    House Bill 2701, which goes next to the full House, would strip utility regulators of their authority to impose such requirements. It would put in a different mandate, this one crafted by Rep. Debbie Lesko, R-Glendale.

    But the mandate is full of loopholes that, in essence, would undo the commission order requiring utilities to generate at least 15 percent of their power by 2025 from solar, wind, geothermal and other renewable sources.

    The legislation would let companies meet that mandate with nuclear or hydro power. That automatically would exempt Arizona Public Service, the largest electric provider, which already gets that much from its share of the Palo Verde Nuclear Generating Station.

    And it would prohibit any utility from being forced to buy “alternative” energy – meaning something other than coal, oil or natural gas – if it would interfere with its ability to provide services at “just and reasonable costs” to ratepayers.

    The move came over the objection of commission lobbyist Amy Love, who said it may be illegal.

    But Lesko said it should be up to lawmakers, not commission members, to set energy policy. And she said the issue has financial implications for Arizonans.

    The problem is that all the permitted forms of renewable energy under the commission order cost more than companies now pay for their power from nuclear, coal and natural gas.

    Former Commissioner Mike Gleason said base costs for power for APS are in the neighborhood of 2.2 cents per kilowatt-hour. He said solar thermal, in which the sun is used to heat water, runs about 14 cents, with wind at 25 cents and direct generation from photovoltaics at 35 cents.

    The commission has allowed utilities to pass on at least part of the cost to ratepayers.

    Lesko said APS is collecting an extra $153 million a year from its customers; utility lobbyist Marty Shultz later put the figure at $81 million. Those costs, Lesko said, come out of pockets of some people who really can’t afford it.

    The 5-2 vote by the House Government Committee came after Polly Shaw, lobbyist for Suntech Power Holdings, said her firm is likely to reconsider its decision, announced last month, to build a solar-panel manufacturing plant in Goodyear.

    She told lawmakers that the decision to locate in Arizona was based in large part on the renewable-energy requirements in the commission’s directive.

    “Voluntary goals don’t build solar projects,” Shaw said, adding that investors want “concrete market certainty” that the products will sell.

    “Broadening the definition of ‘renewable’ to include nuclear and hydro power will gut the renewable standard,” Shaw testified. “It will obliterate demand for solar.”

    But Marv Worthen, Sun City Taxpayers Association director, said lawmakers also must look at the effect on taxpayers.

    He said people who retired years ago are living on minimal Social Security or retirement payments.

    1st February
    2010
    written by Arizona Kid
    GUEST OPINION

    ’60s urban renewal removed blight, set stage for future

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    buy this photo is a partner in the Tucson law firm Lewis and Roca LLP.

    Recent public comments have mischaracterized Tucson’s 1960s urban renewal program as directed, bad decisions made 40 and 50 years ago, an impediment to downtown redevelopment, a mistake by which Tucson lost 300 to 400 historic houses and the cause of the demise of downtown.

    Such comments, many of which may have become accepted as “conventional wisdom,” do not square with the facts. So let’s set the record straight.

    Years before Tucson’s downtown urban renewal project was first proposed in the ’50s, the area (much of downtown and the community center area) had become blighted. Many people and businesses had left. The Old Pueblo District, Tucson’s first 392-acre urban renewal project, was proposed in the late 1950s but not submitted to a public vote.

    Tucson Citizen columnist Don Schellie wrote: “If Tucson has a skid row, then this is it. Meyer Street and the network of alleys and avenues that surrounds it – Sabino, Convent, Ochoa, McCormick, Franklin. Skid row, Tucson, Arizona, USA.”

    In September 1964, the Tucson City Council wanted a new plan. They recognized that the south Meyer Street area had become, by the 1950s, a “blighted and deteriorated” slum area; changing economic patterns had forced residents and businesses to seek new locations in growing areas of the community (El Con Mall, the first enclosed shopping mall in Tucson, planned in the late 1950s, opened in 1960); absentee slumlords neglected building maintenance; many buildings stood vacant; and private enterprise was not going to be able to undertake downtown revitalization.

    This effort resulted in the Pueblo Center Project, covering 80 acres of the initial 392-acre plan.

    On March 1, 1966, a referendum on this federally financed project was approved by a 3-2 vote of the people. The Pueblo Center Redevelopment Project provided for:

    • The Tucson Art Center, incorporating several restored historic buildings.

    • Sites for the county’s present administration, courts, health buildings and federal building.

    • The 610-space El Presidio parking garage.

    • Pedestrian overpasses.

    • La Placita.

    • A 300-room hotel.

    • The Convention Center, Music Hall, 500-seat (Leo Rich) theater and exhibit hall.

    • Sites for a central fire station and police station.

    This scaled-down project, initiated in 1964, targeted the heart of the blighted and deteriorated slum area, which involved 118 individual householders, 142 families and 105 businesses. It was a prudent civil decision and the result of, and in response to, the well-documented deteriorating conditions in the area – clearly not their cause.

    From the 1970s on, with some notable exceptions (La Entrada projects, the east end of downtown and planning for the new modern streetcar line), the city has been unsuccessful in stimulating meaningful downtown residential redevelopment. The controversial Rio Nuevo project boundaries excluded much of downtown and primarily focused on the Convention Center area and the area west of Interstate 10.

    The Pueblo Center Urban Renewal project, in fact, stabilized downtown by providing needed infrastructure and sites for public and other buildings, and strategic private development.

    The central element lacking in the 1960s redevelopment project was provision for a downtown housing component, ostensibly to be provided by the private sector. Its absence remains today as the principal barrier to robust downtown development.

    Still, without the stimulus provided by urban renewal decades ago, the present downtown would have deteriorated even more – exponentially.

    Tucson needs a vibrant downtown. Unfortunately, not nearly enough has been done in recent decades to make this happen. Redevelopment in the east end of downtown and a modern streetcar line can serve as an impetus for a new and rejuvenated future downtown, for which urban renewal provided the foundation.

    E-mail S. L. Schorr at SSchorr@LRLaw.com

    1st February
    2010
    written by Arizona Kid

    Projects

    Tucson Modern Streetcar
    Tucson Department of Transportation (TDOT)
    Tucson, Arizona
    The Tucson Department of Transportation (TDOT) recently completed Phase I of a Major Transit Investment Study to identify transit solutions that meet the challenges of population growth and limited parking in the city core. HDR|SRBA worked closely with TDOT and stakeholders to conduct an alternatives analysis that balanced mobility needs with the costs, benefits, and impacts of several transit alignment and technology alternatives, including modern streetcar, historic trolley, and rapid bus circulator.

    More Information

    »

    Tucson Department of Transportation’s Transit on the Move Web site

    After extensive public input and detailed analysis, modern streetcar emerged as the Locally Preferred Alternative (LPA) and received unanimous approval from the City of Tucson Mayor and Council. When complete, the system will include 3.9 miles of track alignment, with 19 stations and 7 streetcars connecting major activity centers in the downtown core of Tucson. The system will become operational by 2011 with capital costs estimated at $144 million. The system is designed as a ‘starter link’ that can be expanded to serve new corridors.

    The Tucson modern streetcar project provided unique opportunity to showcase how a transit project can lead a community to sustainable choices, creating a healthier place to live. The Tucson modern streetcar is the sole transit project among more than 230 projects accepted into a pilot program for the U.S. Green Building Council’s new LEED for Neighborhood Development (LEED-ND) initiative. This expansion of the LEED program creates a national certification for sustainable neighborhood design and development.

    Daily ridership is expected to reach 4,000 passengers each weekday, with a capacity of 130 passengers per streetcar. The project demonstrates several key goals of the LEED-ND pilot, including:

    • Increasing transportation choices
    • Decreasing automobile dependence
    • Encouraging healthy lifestyle choices
    • Reducing sprawl-type development

    Features

    • Extensive stakeholder involvement included partnering workshops with team building and brainstorming to identify issues and roadblocks to project success
    • Costs split 50/50 between local funding and FTA Small Starts funds
    • Design flexibility for construction within tight urban corridors and operations alongside other traffic
    • Fixed guideway electric rail system operates on a single track at street level in urban zones, enabling tight turns in busy intersections
    • Overhead contact systems can use existing poles with street lights and anchors embedded in building facades
    • Passenger platforms are simple to construct and ADA-compliant

    Benefits

    Environmental

    • Minimizes greenhouse gas emissions, reducing overall carbon footprint
    • Cleaner air
    • Powered by electricity

    Social

    • User-friendly, ADA-compliant design allows wheelchairs, strollers and bicycles to be rolled directly onto streetcars
    • Reduces vehicle traffic and congestion, leading to increased mobility and livability in a developed city core
    • Preservation of valued historic and cultural community resources
    • Links neighborhoods with activity centers through Transit Oriented
    • Development (TOD) while operating safely in high traffic and pedestrian areas

    Economic

    • Point-to-point service with efficient travel time, increasing people-carrying capacity without the need for road widening
    • New development fits with existing neighborhoods and businesses
    • Economic development along the streetcar route will enhance urban revitalization
    • Construction does not require shut down of entire roadway systems
    • No new infrastructure required for signaling and communication systems

    1st February
    2010
    written by Arizona Kid

    In many ways, the Phoenix Convention Center’s $600 million expansion has made it more popular than ever.

    The project, which opened in January 2009, tripled the size of the area once known as Phoenix Civic Plaza, helping Phoenix land the NBA All-Star Game and host President Barack Obama.

    The complex brings tourists who fill hotel rooms, eat at restaurants and visit destinations around the state. It has hosted a string of high-profile national groups and numerous smaller events.

    But the convention center’s balance sheet tells another story. The center has been forced to cut its own operating budget, its revenue is falling and it is soon expected to struggle to make payments on its construction debt.

    The budget woes come in spite of a track record that might look like success: Overall, attendance has tripled. There were 273,000 convention attendees in fiscal 2008-09, up from 106,000 in 2007-08. In the first year since the expansion was complete, the center brought in $5 million more in rental fees and food commissions than it had in previous years.

    In spite of those numbers, the center is struggling, largely because of the structure of its funding system. It relies mostly on a certain portion of city sales taxes, which includes a part of the hotel bed tax but comes largely from purchases involved in construction. Those tax revenues plummeted amid the economic slump.

    The center also draws revenue from its rental fees. But the largest conventions often use the facility at a discount or even for free.

    Director John Chan estimates that current budget conditions can be managed for only two years and worries that cuts to operations will hurt the ability to attract future events.

    “You get to a point where you start to impact the operational side, having a first-class facility and being able to provide a high level of customer service,” Chan said.

    The financial picture

    City taxes provide 80 percent of the convention center’s revenue. Receipts from the taxes that fund the center are falling and are expected to generate $34.8 million this fiscal year, 30 percent less than previous projections.

    Phoenix runs the convention center, Phoenix Symphony Hall and the Herberger and Orpheum theaters out of a shared operating budget, but the bulk of that fund goes to the convention center. The city cut that budget from $63 million to $50 million this fiscal year.

    Among the effects:

    • The center has cut more than 60 vacant positions, is setting aside less money for future equipment replacement, and has strategically cut back on some cleaning, such as the frequency of window washings and carpet scrubbings.

    • The center is having trouble paying the $14.9 million annual payment on its $300 million city debt. The city and the state split the original $600 million cost. The center is paying the city portion of the debt with surpluses from past year’s convention-center funds.

    Just 20 percent of the convention center’s operations budget is funded by income from conventions, such as rental fees.

    Some of the most lucrative convention-center events – such as the NBA All-Star Game’s fan amusement park – used the facility for free or at a discount. Phoenix gave rental discounts worth nearly $637,000 in 2009, according to city documents provided in response to The Arizona Republic’s public-records requests.

    It’s a common practice in the meeting industry and helps cities vie for mega events, experts and Phoenix officials say. Even if Phoenix had charged full price for the events, the center would still face financial problems, they say.

    Tough challenge

    The national economy and travel slump add worries for the future.

    Nationally, many meeting planners are booking fewer events and budget-conscious travelers are attending them in smaller numbers, according to Professional Convention Management Association.

    Phoenix tourism officials, who book many convention-center events 14 to 18 month out, are already working on the center’s 2012 and 2013 calendar. Some anticipate it will be tough to finalize contracts for many of those tentative bookings, because of the economy.

    The convention center’s financial woes pose a challenge for cash-strapped Phoenix, which already is poised to cut tens of millions of dollars in city services to help close a $240 million budget shortfall.

    The convention center’s budget is separate from the city’s general fund, so its financial problems don’t affect city services. But if the convention center ends up in bigger financial trouble, ultimately the city is responsible. And the center’s financial health is critical for tourism, an economic engine for Arizona.

    National trend

    The Phoenix Convention Center’s financial dilemma is not unique, experts say.

    Depending on the location, it’s common for convention centers to receive significant government subsidies, such as hotel taxes, to cover most operating expenses, said Deborah Sexton, president and CEO of the Professional Convention Management Association.

    Communities invest in convention centers because they bring prized high-spending, out-of-town conventiongoers, who shop, fill surrounding hotels and eat at local restaurants.

    The problem is that the recession has hit both sources of revenue for convention centers. Less travel means less hotel tax money to subsidize the local convention center. At the same time, fewer groups are booking events and fewer people are attending them, Sexton said.

    On a recent afternoon, attendees of a utility-industry conference walked past the gleaming, angular glass walls and the towering modern art in the convention center’s North Building.

    Mari Willis, Teri Bowman and Chris Heintz, all engineers for a Nevada company, gave the building high marks.

    “They have the latest technology,” said Willis, from Reno. All of the meeting rooms had Internet access, and at one event the presenter showed a YouTube video to the crowd, she said.

    This is the second year that the industry conference has been held in Phoenix and the customer service was as good as last year, the trio said.

    City leaders want to keep it that way.

    It’s important that the convention center stay in the black, said Councilwoman Peggy Neely who sits on the city’s downtown subcommittee.

    In addition to a new funding formula, the city should look at hiring an outside company to run day-to-day operations, which would lower expenses, she said. The city could take up that issue this fall.

    “It’s a concern for me, and it’s a huge investment for Phoenix and the state of Arizona,” she said.

    For now, budget cuts are enough to get the center get through the year.

    “I am concerned that the budget cuts at the Convention Center will impact customer service just as I am concerned about budget cuts in Police, Fire, Parks, Libraries, Human Services and other city departments,” Mayor Phil Gordon said.

    1st February
    2010
    written by Arizona Kid

    After being slapped with the label “anti-business” during last year’s City Council campaign, the city is on the verge of hiring a new building official who city leaders hope will be able to navigate the roadblocks for businesses in the city’s Development Services Department.

    In the midst of a budget crisis where the city just laid off nearly 100 employees, the city will interview about eight candidates, both local and national, to identify a new Development Services “fixer” by early April, said City Human Resources Director Cindy Bezaury.

    The new building official will oversee the building-permit and safety operations within the city’s Planning and Development Services Department. Department head Ernie Duarte said the new hire will report to him, and be the city’s one contact for building codes and will problem-solve to help get plans for businesses through the city’s process faster.

    “That’s one thing I’ve heard over the past several years,” Duarte said of having one person be the end-all and be-all for the city’s building codes. “It is a key to getting projects through our system.”

    The new hire could make as much as $108,000 depending on experience, Bezaury and Duarte said. But Bezaury noted that candidates coming from outside the area will be paying their own way to come to the interviews.

    The new position will be protected under civil service rules, so the city isn’t required to foot the bill for travel, Bezaury said. The position was approved by the City Council as part of a new work plan in November, she said.

    Last fall, when city election campaigns were in high gear, the Republican challengers blasted the City Council for being anti-business, and the Democratic incumbents agreed, ripping the city’s land-use code and criticizing Development Services.

    Councilwoman Nina Trasoff was ousted, and Councilwoman Karin Uhlich survived by only 195 votes.

    Uhlich said she’s concerned about the impact on the city’s budget, but said sees the new building official as a key to improving Development Services because that person will be able to provide clarity to permit applicants and have the final say on what gets approved and what doesn’t.

    “We need somebody with the authority and the final word,” Uhlich said. “Someone who is highly available and accessible.”

    In the past, Uhlich said, the person who was the building official was also handling multiple duties so it made it hard to be “focused and available.”

    The problem is the budget, Uhlich said, adding that some in the community wouldn’t want the city to “create a new highly compensated position that hits the budget.” Uhlich said she wants addition of the new building official to be “budget-neutral.” One way to do that is to promote someone currently within the city and then eliminate his or her former position.

    Bezaury said the money for the position will come from funds generated by Development Services.

    Eric Abrams, a developer who lost his midtown housing development after the neighborhood fought his project and the economy tanked, said he sees the hiring as a step in the right direction at City Hall.

    The key unknown, Abrams said, is, “What kind of authority will they really have and will you have someone who is willing to take on the powers that be,” such as neighborhoods.

    He said there could be a real positive effect if the new person focuses on expedited plans and interacting with businesses in a user-friendly manner.

    “This makes sense if we’re going to get someone to carry the ball and get things done,” Abrams said. “It’s a positive step by the city of Tucson.”

    Contact reporter Rob O’Dell at 573-4346 or rodell@azstarnet.com

    1st February
    2010
    written by admin

    Commuter Rail: 1. Dig Hole. 2. Pour In Money 3. Repeat

    The AZ Republic, long-time cheerleader for our current light rail project, writes another ode to commuter rail.  Today’s love note is on the Albuquerque commuter rails system.

    Sharon Hedrich heads out a little before 7 each morning for the 20-mile
    trip to the law office where she works in downtown Albuquerque. She
    used to leave home earlier for the dreaded crawl down the city’s
    congested freeway.

    Driving to work could take 40 minutes or
    more, depending on the number of emergencies stalling traffic. Now, she
    boards a commuter train, settles into a plush red seat and spends the
    half-hour ride reading a novel.

    She says the train saves her aggravation – and money.

    “I put 7 miles a day on my car instead of 50,” Hedrich said recently as
    the train zipped toward Albuquerque, New Mexico’s largest city. “It’s
    50 bucks a month for me to ride this. I couldn’t even get two tanks of
    gas for that.”

    I am just all aglow for Sharon.  But does the project make sense for the taxpayers of the city and the state (and probably nation) that funded it?  Well, we don’t know.  Because the AZ Republic writes 56 paragraphs lauding the system without once telling us anything about the system performance.  Does it cover its costs?  Are city roads visibly less congested?  Is there a net energy savings?  Is there measurably less pollution?  We don’t know.  All we know is that three people, Geronimo Trujillo, Briana Duran, and Sharon, like it.

    Well, let’s see if we can do the analysis that the Republic couldn’t manage.  We are told it has 3000 presumably round-trip riders a day, and the fare for these riders is $50 per month.  That’s $150,000 of revenue a month or $1.8 million a year.  How much does it take to operate?  Well, we are not told by the Republic and the Albuquerque authority ties itself in pretzels avoiding the question in this FAQ (question 1) comparing apples to oranges and lemons and bananas and any other fruit that might divert our attention.  But I can absolutely guarantee that it costs a hell of a lot more than $1.8 million.  I am not sure that covers the fuel bill, but it certainly does not cover wages, fuel, maintenance and whatever the state is paying the private owner of the rails for trackage rights.

    Let’s see if we can find an analog that does disclose its costs to the public.  The commuter rail system in Northern Virginia called the VRE is about twice as long and carries about twice the passengers as the Albuquerque system.  Its costs are $55.4 million per year, so we can conservatively assume that the Albuquerque system is costing perhaps $20 million a year, a figure that exceeds its revenues by a factor of 11x.  That equates to a taxpayer subsidy of $6,000 per rider per year, which is not atypical for these systems.

    And this ignores the capital cost.  Unbelievably, the article does actually mention the capital cost in the 36th paragraph, which is $135 million.  That is $45,000 per rider, or enough to buy two Prius’s for each rider.

    So Sharon Hedrich is happy?  Of course she is freaking happy.  The taxpayers paid $45,000 up front costs and $6,000 per year so she can save 43 miles of driving a day.  Assuming she has a 20 mpg car, pays $3 a gallon for gas, and rides the train to work 250 days a year, taxpayers are paying $6,000 a year to save Sharon $1,612.50 a year in gas.  If we want to consider gas plus wear and tear on her car at 45 cents per mile, taxpayers are paying $6,000 a year to save Sharon $4,837.50 per year.   The taxpayers would have been better off — by a LOT — buying her a Prius and paying her expenses to drive than buying and operating a train for her.  This is consistent with my past number crunching on other urban rail systems here and here.

    Does the Republic mention these problems?  Sort of:

    The system endured the typical raps against a big public-works project:
    It fell behind schedule, an anti-tax foundation called it a bad idea
    and there were some startup problems.

    Dang those tax foundation guys – always getting in the way of progress!  Thank god such a great idea as subsidizing Sharon “endured” these Luddites.

    By the way, I am a long-time train watcher and model railroader.  I love trains.  And, all things being equal and if everything was free in the world, I would love to have more commuter rail trains. Unfortunately, all things are not free.  And in most cases, particularly low-density cities outside the northeast, rail tends to be the most expensive possible option.  As a libertarian, I would rather the government just not appropriate this money in the first place.  But given that they are insisting on spending $135 million plus $20 million a year on transportation, nearly any other conceiveable project would have gotten more bang for the buck.

    Update: Below is a picture of Brianna Duran riding in an empty rail car.  It’s good Albuquerque is keeping all those empty seats off the highway.

    0930rail

    Update 2: Here is the predictable response to the empty seat snark:  Well, it’s the people’s fault for not choosing such an obviously superior mode of transport.  Wrong.  Its the government’s fault for not taking people’s preferences into account when spending all that taxpayer money.  A government that adjusts itself to the citizens is a Democracy.  A government that demands citizens adjust themselves to the government is fascism.

    Update #3: I am getting email about the government subsidy of highways.  In theory, this is not supposed to be a subsidy.  The large gasoline prices we pay at the pump are supposed to be for highway funds.  This is actually a pretty intelligent way to pay for roads, because it does a decent job at matching use to fees, with a bit of a penalty thrown in for low mpg cars.  To the extent that gas taxes do not match road costs, I am all for eliminating any subsidy and making them match with the right gas tax.  But I know whatever subsidy there is is not as high as for this rail.  Using the numbers for this example, applied to 100 million US commuters, would imply a capital cost of $4.5 trillion and a yearly operating subsidy of $600 billion.  And this would only cover commuting.  Remember, the people in the story can’t give up their cars – rail lines only run a few places.  These costs would be to allow commuters to give up their cars part of the time — about the same number of roads and cars would still be necessary.

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