Last Modified on 10/09/2009 09:23:51
CITY OF PHOENIX
CITY COUNCIL POLICY SESSION
TUESDAY, SEPTEMBER 29, 2009 - 2:00 P.M.
PHOENIX CITY HALL LOBBY,
ASSEMBLY ROOMS A, B, AND C
200 WEST WASHINGTON
Pursuant to A.R.S. § 38.431.02, notice is hereby given to the members of the City Council and to the general public that the City Council will hold a meeting open to the public on Tuesday, September 29, 2009, at 2:00 P.M. located in Phoenix City Hall Lobby, Assembly Rooms A, B, and C, 200 West Washington, Phoenix, Arizona. Council members may participate by telephone. As indicated in the Agenda, the City Council may vote to go into Executive Session, which will not be open to the public, for the purpose of discussing those matters listed on the Agenda.
AN EXECUTIVE SESSION WAS CALLED FOR THIS TIME AT THE POLICY MEETING OF SEPTEMBER 15, 2009.
THE TIMES LISTED FOR AGENDA ITEMS ARE ESTIMATED. ITEMS MAY BE DISCUSSED EARLIER OR IN A DIFFERENT SEQUENCE.
Action Taken:
Vice Mayor Simplot called the meeting to order at 2:10 p.m. with Council members Gates, DiCiccio, Johnson, Mattox, and Williams present. Mayor Gordon, Councilwoman Neely and Councilman Nowakowski were not present.
ESTIMATED
COUNCIL INFORMATION AND FOLLOW-UP REQUESTS.
This item is scheduled to give City Council members an opportunity to publicly request information or follow-up on issues of interest to the community. If the information is available, staff will immediately provide it to the City Council member. No decisions will be made or action taken.
Action Taken:
Council members made general announcements, commended staff for work completed, and submitted questions for staff follow-up.
CONSENT AGENDA.
Action Taken:
There was no consent agenda.
CALL FOR AN EXECUTIVE SESSION.
A vote to call an Executive Session may be held.
Action Taken:
Councilman Johnson motioned the City Council, pursuant to Arizona Revised Statutes, Section 38-431.02.A, meet in Executive Session on Tuesday, October 13, 2009 at 1:00 pm and Wednesday, October 14, 2009 at 3:00 pm in the East Conference Room, 12th Floor of the Phoenix City Hall, 200 West Washington Street, Phoenix, Arizona. Councilman Mattox seconded the motion, which passed unanimously.
This item is scheduled to give City Council members an opportunity to ask questions about the Formal Agenda on September 29, 2009. If the information is available, staff will immediately provide it to the City Council member.
REPORTS AND BUDGET UPDATES BY THE CITY MANAGER.
This item is scheduled to allow the City Manager to report on changes in the City Council Agenda and provide brief informational reports on urgent issues. The City Council may discuss these reports but no action will be taken.
Action Taken:
City Manager Frank Fairbanks noted an add-on to the Formal Agenda for authorization to award and contract Youthbuild Program funds.
Mr. Fairbanks announced several awards the City or employees recently received.
2. 2:30 P.M.-
DOWNTOWN SHERATON HOTEL ACTIVITIES AND PARKING UPDATE
Staff: Krietor, Chan
(Presentation 10 min.)
This report provides the City Council with an update on the publicly financed and privately operated 1,000-room hotel in downtown Phoenix.
This item is for information only. No City Council action is required.
Backup included in Council packet/City Clerk's Office.
Action Taken:
Dave Krietor, Deputy City Manager introduced the item and Jerry Harper, Economic Development Program Manager; Robert Hayward, Asset Manager with Warnick & Co.; and Leo Percopo, Sheraton General Manager.
Mr. Harper provided a presentation that highlighted the hotel’s accomplishments leading up to the one-year anniversary. Mr. Harper also discussed the new parking design that addressed previous congestion issues.
Councilman DiCiccio left the meeting at 2:30 pm.
Mr. Hayward discussed the challenges with the current economy but noted the Sheraton’s performance was encouraging for 2010-2011. Mr. Percopo thanked Council members for their involvement in attracting and securing clients for the hotel.
Councilman DiCiccio returned at 2:36 pm.
Councilman Johnson asked what the acceptable wait time is for valet parking. Mr. Harper indicated 7-10 minutes for catered events with an attendance of 700-1,000 guests.
Councilman Mattox stated he looked forward to hearing whether the Sheraton received the 4 Diamond award from AAA.
Vice Mayor Simplot thanked Mr. Percopo for welcoming local organizations and businesses.
ESTIMATED
*3. 2:45 P.M.-
PHOENIX CONVENTION CENTER UPDATE
Staff: Krietor, Chan
(Presentation 10 min.)
This report provides an update on activities at the Phoenix Convention Center (PCC) since the opening of the North building, capping the final phase of the $600 million expansion
This item is for information only. No City Council action is required.
Backup included in Council packet/City Clerk's Office.
Action Taken:
Dave Krietor, Deputy City Manager introduced John Chan, Interim Phoenix Convention Center Director; Danielle Lazor, Aventura General Manager; and Steve Moore, President & CEO, Greater Phoenix Convention & Visitors Bureau to provide an update on the operations of the new Phoenix Convention Center.
Mr. Chan stated that after the 900,000-square-foot expansion had been completed in January of 2009, the Convention Center ranked in the top 20 largest convention centers across the country. Mr. Chan stated that in May of 2009, the Convention Center simultaneously hosted the National Rifle Association, 3 Arizona State University Graduations, and another conference for a total of 80,000 attendees over the course of a weekend. Mr. Chan explained many businesses were booking events at the last minute, however, there had been a 164% increase in attendees since the expansion.
Mr. Moore noted the importance of attracting new convention clients which can result in repeat or multi-year bookings. In addition, Mr. Moore stated that there is strong competition from smaller and larger convention centers due to the economy. He also stressed the significance of repeat business which will eventually account for 20-30% of future bookings.
Ms. Lazor noted that Aventura is reinventing event cuisine, focusing on providing world class service and experience. Ms. Lazor introduced two concepts: the boutique retail space which will become a one-stop shop for the planning stage of events, and a high-end custom home kitchen experience where the chef will interface with clients. Ms. Lazor extended an invitation to the grand opening for the boutique retail space on Wednesday, September 30, 2009 from 3:00 pm to 7:00 pm.
Mr. Chan noted the Convention Center was one of eleven LEED-certified buildings and will host the Annual Greenbuild Expo in November 2009.
Mr. Krietor thanked Phoenix residents, who voted to fund the expansion, and the State of Arizona, which paid 50% of the cost to make this project work for the community.
Councilman Johnson asked about the food court. Ms. Lazor stated the name of the food court is Metro Marche, adding it consisted of 6 outlets with 4 of them occupied by Minority/Women/Small Owned Businesses open to the general public.
Councilman Mattox thanked Aventura for exceeding expectations and congratulated them on their accomplishments.
Councilman Gates thanked staff and Aventura for their hard work and success. He also asked Mr. Moore to address strategies to attract future business. Mr. Moore thanked Council for their continued support in securing new convention business. He stated that having community leaders volunteer their time to attend face-to-face meetings with clients helped establish trust and attract business. Mr. Moore also mentioned that weekly site previews by potential convention clients would continue.
Vice Mayor Simplot complimented Aventura’s chef, noting he was constantly impressed with the staff and service.
ESTIMATED
*4. 3:00 P.M.-
TRANSIT 2000 SALES TAX AND BUS PROGRAM UPDATE
Staff: Zuercher, Cotton
(Presentation 10 min.)
This report provides an update on Transit 2000 (T2000) sales tax revenues with possible options to address a projected bus program deficit. In addition, guidance on next steps to address the shortfall as well as approval to pursue resource reallocations is requested.
This item is for information, discussion, and possible action.
Backup included in Council packet/City Clerk's Office.
Action Taken:
Ed Zuercher, Deputy City Manager stated that due to the difficult budget times, staff identified options to resolve funding issues in the Transit 2000 fund. Mr. Zuercher requested that the City Council provide feedback and direction to address the issue. Mr. Zuercher introduced Debbie Cotton, Public Transit Director and Lauri Wingenroth, Assistant Public Transit Director.
Ms. Cotton stated the sources of revenue for public transit consist of sales tax, advertising, State Lottery funds, and General Fund. Ms. Cotton emphasized these sources have experienced a decline in revenue or funding. Ms. Cotton outlined several broad approaches that could address Public Transit’s growing deficit.
Ms. Wingenroth pointed out that the four cent sales tax approved in 2000 has a 20-year life. Ms. Wingenroth noted staff had reviewed the projected future operational costs and revenue and the need for a balanced budget. She stated the revenue projections for the budget assumed a 25-cent fare increase every third year. Mr. Zuercher stressed that this assumption was only a suggestion and would require Council discussion and action to initiate. Mr. Zuercher also stated the department’s goal of receiving 25% of operating revenue from fare box recovery is achievable in a large transit system like Phoenix.
Ms. Wingenroth stated that in 2000, it was projected that the fund’s revenue would increase by 5.25% annually over the 20-year life span of the proposition. She explained that actual sales tax revenue growth for the Transit 2000 fund to date was 1.6%, resulting in a loss of $60 million in projected revenue. Additionally, Ms. Wingenroth noted that higher fuel costs impacted fare revenue and that it is too early to assess the impact of the recent fare increase. Ms. Wingenroth indicated staff’s projected revenue is also below projections.
Ms. Wingenroth stated Local Transportation Assistance Fund (LTAF), formerly the AZ Lottery, had been a consistent funding source in the past. However, she noted that accurate future projections are not possible with this funding source, citing the unpredictability of State actions and formula calculations based on census data. Ms. Wingenroth stated LTAF II, formerly known as Powerball, was historically unreliable and used for one-time capital purchases. Ms. Wingenroth noted that LTAF II had been used the previous fiscal year for operating costs and was becoming a more reliable source of funding. She noted LTAF II is based on the size of Powerball sales and jackpot. Ms. Wingenroth added that the Alternative Fuel Credit for LNG usage is an important funding source for the operating budget and staff is reviewing ways to increase Federal reimbursement.
Ms. Wingenroth summarized the year-to-year actual revenue to the 2000 projection and noted a loss of $21 million. Mr. Zuercher added that the current year revenue projection represents a loss of seven years of growth.
Councilman DiCiccio asked what happened in Fiscal Year 2005-06. Ms. Wingenroth replied that revenues grew at 17.6% over the prior year; however, two years ago, revenues began a negative trend and last year revenue was down 16% versus the prior year.
Ms. Wingenroth stated that there is $650 million less in projected resources for the transit program over the next eleven years ending in 2020. She stated expenditures are exceeding revenues and that fund balances had already been used to cover operating cost.
As part of potential actions, Ms. Cotton suggested that the City utilize LTAF II for operating expenses, examine the delay of capital projects, reduce facility/landscape maintenance and security contractual costs, and review reductions of bus service. Ms. Cotton indicated a set of guiding principles will be taken into account through the process.
Ms. Cotton stated that staff had enough information to analyze the efficiency of bus routes and modify for effectiveness. Ms. Cotton pointed out that one change to the bus service could potentially save $50,000 per year. Mr. Zuercher also acknowledged the need to balance reductions with maintaining service. He noted that staff will bring back different options for Council input.
Ms. Wingenroth presented Council with three options for dealing with the deficit over the next three fiscal years:
Option 1
A reduction totaling $16 million in Fiscal Year 2010-11 with no planned reductions in Fiscal Year 2011-12 or 2012-13.
Option 2
A reduction totaling $17-18 million, with a reduction of $10-12 million in Fiscal Year 2010-11, no reduction in Fiscal Year 2011-12, and an additional reduction of $5-8 million in Fiscal Year 2012-13.
Option 3
A reduction totaling $18 million spread out over the three years with $8 million in Fiscal Year 2010-11, $5 million in Fiscal Year 2011-12, and $5 million in Fiscal Year 2012-13.
Ms. Wingenroth stated staff was recommending Option 2, reducing twice over a period of three years for a total of $18 million. She added this would allow time for transit users to make the transition and create the opportunity for the economy to improve. She stated staff was not recommending the first option due to the immediate impact and hardship on transit users, or the third option which would create constant for customers.
Ms. Cotton provided recommendations to Council that included the use of LTAF II funds for operating costs; evaluation of capital project delays; assess use of Prop 400 and ARRA funds to supplement bus service; and pursue option 2, the two-step approach to service changes.
Vice Mayor Simplot asked if Council was being asked to provide general direction. Mr. Zuercher replied yes.
Councilman DiCiccio stated he thought staff should look into the efficiency of services and delay of capital improvement projects. He also requested that staff review programs that were added in 2006-2007 and 2007-2008. Councilman DiCiccio also asked about the status of cab vouchers for Dial-A-Ride users. Ms. Cotton stated the grant application is being reviewed and, once approved, funding would be available for a cab voucher program. Councilman DiCiccio also requested that staff review the organizational structure, stating services should not be cut.
Councilman Mattox asked what the difference is between option 2 and 3. Ms. Wingenroth explained that option 2 would provide time to evaluate further cuts whereas option 3 did not. Mr. Zuercher added that in option 2, staff would have a full year of data to evaluate reductions to bus service. Mr. Zuercher explained that more time would provide more information; however, staff was willing to carry out whichever option was preferred by Council. Councilman Mattox asked staff what the need was for the significant cut on the front end under option 2. Mr. Zuercher stated staff would show what the significance of $8 and $12 million cuts and evaluate impact.
Councilwoman Williams asked if step approaches included total operational costs and if revenues could be shifted. Ms. Wingenroth stated that $1.7 million of LTAF II funds had been identified and assumed to pay operation costs. Ms. Wingenroth also noted that other revenue would be ongoing in nature depending on increases, shifts, and reductions. Councilwoman Williams asked if both were inclusive. Ms. Wingenroth replied yes. Councilwoman Williams asked if the shift of lottery revenues would be for this year. Ms. Wingenroth replied that the revenues would continue being a source.
Councilwoman Williams emphasized she did not want to cut services, especially Dial-A-Ride. She also wanted more details on the next 3 to 4 years of the capital improvement program before making a decision to delay projects. She also stated her concern with the process of cutting or adjusting routes and requested analysis and review of circulator routes. Lastly, Councilwoman Williams asked that staff review the organizational structure for potential reductions.
Vice Mayor Simplot stated this item should be deferred to the Transportation, Infrastructure and Sustainability Subcommittee. He stated that he was uncomfortable with the reduction of the security, facility and landscape maintenance contracts. Ms. Cotton replied that the information presented were ideas only. She added that all ideas would be reviewed thoroughly and brought back to Council for input and feedback. Mr. Zuercher also stated that City Council authorization was needed before moving forward.
Councilmen Mattox and DiCiccio requested this item be readdressed at the Transportation, Infrastructure and Sustainability Subcommittee. Councilwoman Williams stated the item had a citywide impact and suggested it be brought back in a Work Study session.
Vice Mayor Simplot stated that there was a consensus to revisit this item in a Work Study session and asked staff to be prepared to address the topic further then.
3:30 P.M.- ADJOURNMENT
Action Taken:
Vice Mayor Simplot adjourned the meeting at 3:52 p.m.
For further information, please call the Management Intern, City Manager's Office, at 602-262-4449.
For reasonable accommodations, call the Management Intern at Voice/602-262-4449 or TTY/602-534-5500 as early as possible to coordinate needed arrangements.
Si necesita traducción en español, por favor llame a la oficina del gerente de la Ciudad de Phoenix, 602-262-4449 tres días antes de la fecha de la junta.
PHOENIX CITY COUNCIL MEMBERS
Councilman DiCiccio
Councilman Gates
Councilman Johnson
Councilman Mattox
Councilwoman Neely
Councilman Nowakowski
Councilwoman Williams
Vice Mayor Simplot
City Council Requests for Information and Announcements
City Council Policy Session
September 29, 2009
COUNCILMAN DICICCIO
Councilman DiCiccio thanked staff for their continued assistance in resolving high-profile zoning cases in District 6. Councilman DiCiccio also requested that City Management investigate complaints concerning youths’ disruptive behavior during bus service. Councilman DiCiccio announced Hallie Villemez, Xavier College Preparatory, was appointed to the Camelback East Village Planning Committee and Jessica Herbert, Mountain Pointe High School, was appointed to the Ahwatukee Foothills Village Planning Committee. Finally, Councilman DiCiccio announced he and his staff would be participating in Walk-to-School events at Orangedale Junior High, Kyrene De La Esperanza, Squaw Peak School, and Madison Camelview School.