>> Mayor Lane: good afternoon,
everyone.
I would like to call to order
our 4 P.M. Work study session.
And we'll start with a roll
call, please.
City clerk carolyn jagger:
mayor jim lane.
Mayor lane: present.
Carolyn jagger: vice mayor guy
phillips.
Vice mayor phillips: here.
Carolyn jagger: councilmembers
suzanne klapp.
Councilwoman Klapp: here.
Carolyn jagger: virginia korte.
Councilmember korte: here.
carolyn jagger: bob littlefield.
Councilman Littlefield: here.
Carolyn jagger: linda milhaven.
Councilwoman Milhaven: here.
Carolyn jagger: dennis robbins.
Councilman Robbins: here.
Carolyn jagger: city manager
fritz behring.
Fritz behring: here.
Carolyn jagger: city attorney
bruce washburn.
Bruce washburn: here.
Carolyn jagger: city treasurer
jeff nichols.
Jeff nichols: here.
Carolyn jagger: city auditor
sharron walker.
Sharron walker: here.
Carolyn jagger: and the clerk is
present.
>> Mayor Lane: thank you.
I will go ahead and mention for
the record this is the work
study session of December 2nd,
2014.
It's approximately 4:00.
And we have no public comment on
this item and we only have one
item on this.
I might just go ahead and
mention that this is a work
study session.
So there are no decisions or
votes to be taken here.
this is primarily to interact
with council and staff.
Our interaction between the
council and the staff with
regard to the subject matter on
this, which is special taxing
district financial policies and
this is a request really for
presentation, discussion and
possible direction to staff
regarding the city's special
taxing district financial
policies, including
revitalization districts,
community facility districts and
improvement districts and the
presenters for this today will
be -- we'll go ahead and get
started and we can work from the
table or the podium, whichever
you prefer is our city treasurer
jeff nichols.
I gave you the option.
>> you gave me the option.
>> Mayor Lane: yes, sit right
down.
>> that being said, I just
realized someone has to move the
slides.
Although I trust brian
immensely, can I go back there?
>> Mayor Lane: I'm sorry, I gave
you options.
It's way too complicated.
>> well, Mr. Mayor, members of
the council, as the mayor
mentioned, at the end of the
November 18 meeting, staff was
given direction to bring this
topic back for work study, and
that's why we are here tonight.
What I thought I would do is
start off with the policies that
we currently have in place
within our financial policies.
Under debt management, number
32, we do have a policy that
deals with improvement districts
and community facility
districts.
Some of this language probably
needs to be cleaned up.
For instance, like in this first
slide, it says that it's
expected that they will be
issued for their full term.
I'm not sure why that wording is
in there.
I'm not sure who put it in
there, to even find out, but
regardless, I.D.S and
C.F.D.S we do have a policy
for.
here's improvement districts and
you notice the debt ratio, prior
to the improvements being
installed is a minimum of 3 to
1, and after issuance of the
debt, and the improvements,
ratio of 5 to 1 after
construction.
Some of the other things that I
would like to talk about that
are embedded in these policies
is the fact that we use the net
assessed valuation, but we also
have in there that if someone
doesn't like the assessed
valuation, I.E., they feel that
the county is lagging or their
valuation of the -- of their
valuations of the properties,
that they can have an appraisal
of the properties done.
It would be paid for by the
politic and administered by the
city.
And in addition, one of the
other things that I would like
to cover later on, that we will
discuss, it says the city's
cumulative improvement district,
that will not exceed 5% of the
city's secondary assessed
valuation.
while I'm in agreement with
that, it also has that same
language and the community
facility district debt and let's
say now we are bringing them to
the -- the revitalization
district, if that was 5%, well,
now you are talking a total of
up to 15% of the net assessed
valuation within the city and
I'm not sure I would be in
agreement with that.
However, similar to that, you
see under CFDs, minimum of 3
to 1 prior to the issuance of
debt.
5 to 1 or higher after the
construction of the improvement.
The difference that I see
between the two, at least in my
experience, normally improvement
districts are done to existing
infrastructure.
The city of scottsdale, four out
of the five districts, it's just
been vacant land and the person
that owned the land within the
cfd, they owned 100% of the land
within the cfd.
so those are the two districts
that we have.
And so like I said, community
facility districts most often
formed to construct
infrastructure improvements on
vacant land.
That's been our experience.
>> Mayor Lane: pardon me just a
moment.
We do have a question of you
from Councilman Robbins.
>> d. Robbins: can you just go
back one slide.
i want to put a couple of things
in context so we are all on the
same page.
The 3 to 1 and the 5 to 1, that
means the debt can be 33% of the
total valuation beforehand is
that saying it in a different
term?
>> yes, sir.
If the total value of the land
was $1 million, they could
construct up to $333,000 of
improvements.
>> d. Robbins: okay and then
afterwards, the 5 to 1, that's a
20%?
>> that's correct.
>> d. Robbins: and then can you
put in context, the 5% of the
city's assessed valuation, what
would that number be?
>> to put that into context, the
number I figured was
approximately $250 million in
debt would be 5% of the city's
net assessed valuation.
>> d. Robbins: and do you happen
to know what our CFDs are at
presently?
>> I dot that have that answer,
but to my left, I see lee
lee
guillory.
>> we have no improvement debt
outstanding.
>> d. Robbins: okay.
All right.
That kind of puts it in context,
though.
Thank you.
>> l. Milhaven: I have a
question.
>> Mayor Lane: yes, Councilwoman
Milhaven.
>> l. Milhaven: if this is for
total assessed value in the
city, or is it the assessed
value in the district?
>> the way the policy -- I
believe, the way I interpret the
policy, as it's currently
written, it will not exceed 5%
of the city's secondary assessed
valuation.
So it would be the whole city.
>> is that by our policy or is
that by the authorizing
legislation?
>> I don't remember if it's in
the authorizing legislation.
I do know it's in our policy.
>> l. Milhaven: thank you.
>> mayor lane and Councilwoman
Milhaven, that's a city policy.
it's not part of the state
statute, the 5% of the city's
assessed valuation.
>> l. Milhaven: thank you.
>> Mayor Lane: lee, can I just
for further clarification, is
this any stipulated amount as
far as the statute is concerned?
>> I'm looking towards my
outside bond counsel and he said
that as far as -- if there are
general obligation bonds
outstanding, there are
limitations, but if they are
assessment bonds, there is not.
I believe the general obligation
bonds would be subject to the 6
and 20% assessed valuation.
No, I'm being told no.
So I will return the floor to
scott ruby.
>> Mayor Lane: for the record,
if you would identify yourself,
scott.
>> certainly, mayor.
Scott ruby with the law firm of
gust rosen feld.
We serve as your bond counsel on
your city issues and city
district issues.
I was hoping to be the potted
plant tonight, but apparently
not.
The cfd statutes have really
only one restriction with
respect to the bonds.
They can issue -- CFDs can
issue three types of bonds,'s
isment
,assessment bonds, general
obligation bonds.
The cfd has their own debt limit
for general obligation bonds and
that debt limit is 65% of market
value plus the value of the
improvements, which is a very
high debt limit.
I don't think anybody ever comes
close to that.
>> are we
>> Mayor Lane: are we more
restrictive then by our policy?
>> our policies, as I have
quickly reviewed them, do not
speak to the general obligation
bond aspect of it.
Typically when we have done
general obligation bonds and
community facilities districts,
and I mean throughout the state,
we're more concerned about a tax
rate and what we do is try to
size a debt issuance that will
produce a certain tax rate.
Now, obviously, that has some
disadvantages when your assessed
valuation starts fluctuating.
That means the tax rate goes up
and down depending on which way
the A.V. Goes.
But normally those types of debt
issues target you a tax rate.
>> Mayor Lane: but those
percentages you just mentioned
go to the district property and
improvements rather than the
city's total bond issuance or
value -- valuation?
>> that is correct, mayor.
I know this conversation was
focused a bit on the 5% limit
that you have by policy, and
that is unique to scottsdale.
That I'm aware of.
Now there May some other
jurisdiction in arizona that I'm
not aware that speaks to this
issue in that context, but I
suspect I would know.
>> Mayor Lane: you can go back
to the plant status for a little
bit.
>> thank you very much.
>> Mayor Lane: oh, I'm sorry.
Wait a minute.
Forget that.
>> v. Korte: one more follow-up
question.
>> Mayor Lane: Councilwoman
Korte.
>> v. Korte: in your experience
working with other
municipalities, what is the
standard as far as 5%, 10%, 7%?
>> mayor, councilmember korte,
the relationship to assessed
valuation for this type of debt,
either cfd or I.D. Is unique to
scottsdale.
I have never seen it in any
other jurisdiction.
That's not to say it's a bad
thing, because improvement
district debt, in particular,
there is contingent liability to
the city, and so I think the
city would have some concern and
I know years and years ago, when
the city of chandler was quite
aggressive on their
infrastructure financing through
improvement districts, the
rating agencies took that
contingent liability into
account and actually shut their
rating down for a while, while
they had significant exposure
there.
So it's a number or a limitation
that is -- that merits
discussion but, again,
scottsdale is the only place I
know that has that.
>> Mayor Lane: thank you again,
scott.
I think we'll give you a little
bit of time.
Mr. Nichols, if you would like
to continue then.
>> yes, sir, Mr. Mayor.
And so what I wanted to do was
to have discussion regarding our
current policies and then also
foster discussion on
revitalization districts.
As you see here, community
facility districts, at least
within the city of scottsdale
are used to form infrastructure
improvements on vacant land.
It's most often brought forward
by persons or entities that own
100% of the net assessed
valuation of the land within the
district and I
I give you the
examples there.
And the practice has been to
issue cfd debt for a period of
25 years, and so my question,
does the council want to
continue past practices and
include those past practices in
a policy that would be brought
forward for your consideration?
The second item there,
improvement districts are most
often formed to construct
infrastructure improvements to
existing infrastructure and I
give the example of the most
recent one, bell road two and
does council wish to improve
district debt to infrastructure
improvements to existing
infrastructure?
Existing
infrastructure?
>> Mayor Lane: thank you, and we
do have -- Councilman
Littlefield has a question or a
comment.
>> r. Littlefield: actually, i
think I will wait.
>> Mayor Lane: okay.
Number one, I just wanted to
sort of further quantify what we
are doing.
You mentioned earlier on that we
do not have any improvement
district debt outstanding.
>> we currently have no
improvement district debt
outstanding.
We have a history of improvement
districts in scottsdale that go
back to about 1959.
and we have done a lot of
improvements within the city
through improvement districts.
>> Mayor Lane: so it's a
mechanism that has been utilized
and successfully?
>> that's correct.
>> Mayor Lane: and it just so
happens that it's paid off and
not been utilized since.
Is there some distinction, if I
May ask this for my own
edification, maybe everyone's
else, what is the distinction?
the improvement district is for
existing infrastructure and a
cfd is for new?
>> Mr. Payer,
mayer, when I looked at
the improvement districts in the
scottsdale, it was for new
neighborhoods coming into the
city, they wanted to put in
infrastructure, which it was
paving, sewer, water, those
sorts of improvements.
They would form an improvement
district.
They would make the improvements
so their district and then those
improvements then would be
deeded over to the city.
My assumption is to operate and
maintain those improvements that
people within the district are
voting to tax themselves.
Normally we sold improvement
district debt and it was retired
over a period of about 10 years.
>> Mayor Lane: so barring the
use some of kind of development
agreement, where you would end
up having impact fees for a
community or a neighborhood for
new now -- a new infrastructure
that would be built, the
improvement district was
something that the property
owners got together and formed
it district under the city's
guidance, of course, and
control, but, nevertheless,
assessed their own properties
with the cost of carrying the
debt for those improvements.
So did the impact fees and those
kinds of things, did that sort
of move away from that or was it
the development -- master
developments and development of
whole neighborhoods and new
neighborhoods where those fees
were sort of mixed in together
with the total -- the total
project?
>> Mr. Mayor, I would have to
look into that particular
question of whether the
assessments related to those
improvements outside the
improvement district assessment
itself, how those were handled.
i have not reviewed that.
>> Mayor Lane: but the
improvement district is property
owners getting together to build
a district and a mechanism to
fund those kinds of improvements
that they need to expand or grow
or frankly, to build the
infrastructure for their
neighborhoods?
>> that's correct.
>> Mayor Lane: okay.
yes, Councilman Littlefield.
>> r. Littlefield: okay.
So we currently have CFDs and
improvement districts in
scottsdale but not any
revitalization district?
>> Mr. Mayor, Councilman
Littlefield, that's correct.
>> r. Littlefield: so how big
can an improvement or a
revitalization district be?
Are there legal limits on the
geography?
can it be only be so big, so
small?
Could a revitalization district
or improvement district
encompass the entire city?
>> Mr. Mayor, Councilman
Littlefield, I will defer to
bruce washburn on that.
I am not certain, however, just
by their very nature, with
revitalization districts, it has
to be property owners that own
51% of the net assessed
valuation within the district
and also 51% of the property
owners within the district.
I would assume that the larger
you make the district, the more
difficult those numbers are
going to be to reach.
>> r. Littlefield: I get that.
I'm just curious as to what the
limit is.
>> potted plant, can we get you
back up here?
>> r. Littlefield: this must be
mr. Washington, right?
>> mayor, councilmember
littlefield, with respect to the
community facilities districts,
improvement districts and
revisallization districts,
there's really no limits on how
big they can be.
I say that, though, with a
caveat and it goes, I think to
somebody who raised a point,
could we have one who is quote,
terminus with the boundaries of
the city?
There is some law to the effect
that if you tried to form an
improvement district or a
community facilities district
that had boundaries go terminus
with the city's boundaries then
in essence, you have city
obligations, city bonds and you
need to follow then your debt
limits with respect to city
obligations, 6%, 20%, and that
sort of thing.
And so the cases put that kind
of governor on it.
These are not special districts
and consequently should not
include all the area located
within the city.
>> r. Littlefield: okay.
But you could have one for half
the city, a third.
Legally.
I understand there are practical
implications.
I'm asking what the legal
implications are.
>> slightly.
There are, again, backing up a
little bit -- improvement
districts are based upon the
theory that all the property
within the district benefits
from the proposed improvement.
So if you are doing half the
city in an improvement district,
obviously benefits half the
city.
Example maybe you build a water
treatment plant and that May
have a wide benefit.
so you certainly could do that
and we have CFDs that are
8,800 acres.
I mean, it's not unusual to have
large areas.
>> r. Littlefield: thank you.
>> Mayor Lane: thank you,
Councilman.
Vice mayor phillips.
>> Vice Mayor Phillips: thank
you, mayor.
Well, Mr. Nichols, just so you
know where I'm coming from and
staff understands, I'm against
revitalization districts and the
improvement districts and I was
against michele reagan's bill
and I fought against it because
I don't believe it's good for
the residents.
I think it's a tax burden and
then they end up -- it's hard to
tell your property when you have
an extra tax placed on your
property.
So I would not be in favor of
any kind of things if they come
up in the future and I would
prefer to see them as restricted
as much as possible.
>> Mayor Lane: thank you, vice
mayor.
I would weigh in on the same
note as far as that is
concerned.
One of the things with this
revitalization district plan was
put forward several years ago
now, the intent was really
almost intergovernmental kind
of -- or multijurisdictional
kind of funding mechanism and
frankly district policy.
And at the time, one of the
things that was being considered
and it never gained any traction
was with the -- with the tribe
and as well as with the city of
tempe on the eastern-most
portion of Mcdowell road, in
that section.
It frankly, was sort of designed
around that and I think it's --
it ended up with an animal that
is somewhat more unique and its
implementation or attempted
implementation of it or use of
it lass caused
has caused some concern, even
when it was presented in the
past for our consideration.
One of the things we tried to
deal with several months ago, in
fact, maybe as much as a year or
two ago was to get some
clarification as to how that
statute would ever be employed
by the city.
Personally, I am not an advocate
of the revitalization district
for a couple of reasons and one
of them is stated in the first
paragraph, and that is the --
and it's shared with the
improvement district, something
I was not really aware of, but
that 49% of the property owners
either by valuation or total
ownership could be subjected to
this type of structure against
their will.
And I find that to be a
difficult thing to swallow.
And it May be one of the reasons
the improvement district is no
longer being used.
The other is the revitalization
district does the same thing.
So I'm not an advocate in both
of these cases.
When we talk about the
improvement in revitalization
districts, I'm not sure whether
or not the districts possibility
at the 51/49% kind of setup, the
51% setup, whether I do want to
continue that policy.
i think it would probably be
something we would rather go to,
either a higher number or
eliminate.
But I certainly don't want to
apply it to the revitalization
district.
There is another element here
too, in that I have been trying
to figure for quite sometime
now, as to what -- what
advantage and, you know, we have
had an awful lot of conversation
as to what it is to the city's
advantage to the property
owner's, what advantage this
kind of structure with an
independent board -- I'm talking
about revitalization district,
where the city and -- well, the
city relinquishes both control
over bonds and taxing in that
district area, even though the
dedication of the streets and
the roads May be given over to
the city.
We lose control over it.
And it does not seem to play
very well when we think about it
in those terms.
I'm not anxious about turning
over responsibility to a mini
town within our city of taxing
and bonding under these
circumstances, particularly when
I don't see that there's any
particular thing that is served
that couldn't be easier served
either by a cfd or even an
I.D.A., where in the case of an
I.D.A., we have maintained a lot
of control and we reduce the
risk and it goes to the private
property owner but it still
remains taxable property in the
city limits.
The same thing with the cfd.
And you want to throw in the
I.D.A.'s advantage, I suppose is
the fees that are accumulated
through that process that we
have found to be beneficial for
the city at different times for
different reasons.
so in answer to both of these, I
wouldn't want to continue either
of these.
Now, it says the property value
ratio, okay, the second -- or
the first question says should
this be a consideration when
setting policy related to the
debt to encumbered property
value ratio?
Well, that is in the
establishment of the district
and help me -- maybe I'm not
clear on that first question.
>> well, my thought in this, and
I was the one that created this,
should this be a consideration
whether setting the policy
related to the debt to
encumbered property value ratio
was you have people within the
district that May be in the
district that didn't vote to be
in the district.
As a matter of fact, they were
on the losing side of that, and
does this governing body still
have a duty to those people that
are in the district that didn't
want to be in the district and
therefore, if you set the ratio
higher, which when it was
brought forward before, as i
mentioned earlier, it was 3 to 1
before improvements and 5 to 1
after.
So would it be for I.D.S and
revitalization districts since
some people May not care for the
improvements even though they
benefit from them.
Should the ratio before and
after, should there be a larger
spread?
should it be a 3 to 1 before or
a 7 to 1 after?
I mean, I don't have that
recommendation on that.
I just wanted it to be a
discussed item.
>> Mayor Lane: Mr. Nichols, is
there anything in particular
that you can cite or that we
could consider as to why -- why
either the improvement or the
revitalization district couldn't
or the purpose that somebody
might use for those couldn't be
better served as far as the city
is concerned with the cfd?
>> Mr. Mayor, members of the
council, in my opinion, and this
is strictly my opinion or my
advice that I would give to you,
is like I do in my personal
life, I would do whatever I had
to do and make it as easy as
possible up front.
So if CFDs could accomplish
the goal and the council was
still -- and oversaw that
district as the governing body
of that district, then you use
that.
To me revitalization would be
the last option I would look at,
because I believe that there are
other mechanisms, other tools,
if you will to accomplish the
same things.
And I think you should go from
simple to complicated and not
just skip everything in between
and just go to complicated.
>> Mayor Lane: well, I think one
of the -- if I were just to
focus for a moment on just the
revitalization district, that
seems to be the greatest
departure from sort of a
structure of governance and
control, than either the other
two, either the improvement
district and/or the cfd.
>> Mr. Mayor, members of
council, I would agree with you,
but I think that was with
purpose.
And, again, because when you are
looking at multijurisdictions
within a district, and as an
example, I would say, where the
city of tempe and phoenix and
scottsdale meet, over by the
papago area, if, in fact, we
were wanting to get to go and
make some improvements for, that
well, I'm sure phoenix would be
willing to say, we'll take
charge of that and tempe and
scottsdale would say, no thank
you.
And the same if tempe said it or
scottsdale said it.
So I think it makes sense in
certain circumstances when you
are crossing governing bodies or
getting more than one governing
body together for a district,
and I -- again, when we get
further in this, my question to
you is: do you want to limit
revitalization districts to
those instances?
>> Mayor Lane: yeah.
>> because, again, I would offer
my opinion, if you have three
governing bodies, the state of
arizona allows to enter into
intergovernmental agreements.
And perhaps you could accomplish
the same thing and it's a tool,
I think, that you work out all
the what ifs beforehand within
the I.G. And go I.G.
Negotiations.
My concern is -- and, again,
it's more of a legal issue, is
with these revitalization
districts, if we get too
involved in forming the
district, or setting up the
parameters of the district, we
May find ourselves in a position
where we do hold some
responsibility for that district
in the future.
>> Mayor Lane: you mean that
riis wok shift over to the city?
>> -- risk would shift over to
the city?
>> we could assume some of the
liability if we get too hands on
with it.
>> Mayor Lane: because it
redefines itself?
>> that's correct.
>> Mayor Lane: well, I will
leave it at that as far as my
opinion is on it.
I think there May some other
comments on it.
I think really truly, I don't
know that we have a continuing
need for the improvement
district and the revitalization
district.
i would say as you just
mentioned, simple first.
If we are we can accomplish with
existing mechanisms right now
and there's no detriment to
anyone, and no further
denigration of the city's
control over bonding and taxing
and control of a segment of our
communicate, I certainly would
rather opt to that.
in fact, I have even heard as
much, that one of the reasons
that some have approached us on
this is frankly to bypass this
body politically and the general
public in their efforts to tax
or bond a segment of our
communicate on
community on the overall.
so I'm concerned about any
policy that sort of locks us in
for that consideration.
So I guess on both of these, I
wouldn't be worried about how
many years on the R.D. Because I
wouldn't think it would be an
option I would like to be
following.
On the improvement district, I
suppose it might stay with the
policy you have now.
it seems to have been harmless
and it doesn't certainly
relinquish all the control
mechanisms that the R.D. Does.
So that's my position on it, as
it is right now.
Councilman Littlefield.
>> r. Littlefield: I guess I'm
curious as to what motivates
this discussion.
Obviously, the question whether
or not you would want these
would be what you are trying to
accomplish.
So I guess I'm curious as to
what it is that we thought we
might want to accomplish that
prompted this discussion.
Is there anything on the table
where somebody said we think we
would like to have an
improvement district or
revitalization district?
i mean we have plenty of CFDs
laying around.
>> Mayor Lane: Councilman, if I
could, I might just say that --
>> r. Littlefield: well, yeah.
>> Mayor Lane: I'm not sure what
the ties might be with some of
the folks and the charter
officers, and they May be but
certainly the city has been
approached a couple of different
times with regard to the use of
this, and they were both found
to be just outside the box
for -- and a lot of it was
centered on the idea of this
control that we are talking
about on taxing and bonds but
also just the overall control
for a district that might
encompass a great deal of area.
But there are also some thoughts
as to what motivated those
people who brought it to us.
And there May have been some
less than straight forward kinds
of considerations as to -- in
the depth of the recession, even
to the point of trying to get
something refinanced, they are
otherwise wouldn't be able to
get refinanced and bail the
original owners out on debt.
>> r. Littlefield: well, that
was exactly my question, not
that I'm a suspicious person or
anything.
>> Mayor Lane: no.
No.
>> r. Littlefield: okay.
But there's nothing on the table
at the moment?
>> Mr. Mayor, Councilman
Littlefield, the reason I
personally brought this forward,
i mean, for discussion, is
because it's November 18th
November 18th council
meeting --
>> r. Littlefield: yes, we asked
you to.
>> I was directed to.
>> r. Littlefield: is there some
proposal on the table somewhere?
>> Mr. Mayor, Councilman
Littlefield, the city manager
and I had met with a person that
was interested in using this
financial mechanism.
it is in the area that was my
understanding because it wasn't
here.
It was brought forward before.
It is a different -- a different
project, however, the person
that brought it forward I had
reached out to them and I had
asked them.
I said from everything that I
see, it's a small number of
people formed an llc.
They own 100% of the land.
Is there any reason, you know,
that you just don't come
forward.
We have a policy related to
CFDs that you do this under.
There's not a need for
revitalization districts.
So I pointed that out.
Yes, there was a person that
brought forward a project that
is interested and we have no
formal process currently for
applying to the city to form a
revitalization district.
That's what we were going to try
to accomplish with this
discussion.
>> r. Littlefield: was this a
Mcdowell road project?
>> no, it was a project up in
the northeast part of the city.
>> r. Littlefield: all right.
Thank you.
>> Mayor Lane: thank you,
Councilman.
Councilwoman Milhaven.
>> l. Milhaven: thank you,
mayor.
This is a conversation that I
started four years ago, and for
me, this conversation is about
the redevelopment district but
it's also about all of the
taxing districts, some of what
we have heard here is this
policy is unique to
unique to scottsdale
and is not in the authorizing
legislation.
I remember four years ago when
we started this conversation, I
read all the authorizing
legislation for all three
districts.
I would have to brush up again
to remind myself of what it
said.
But at the time the former
treasurer and I had
conversations around the
policies related to these
districts and I realized our
differences in looking at the
policies come from our different
points of view.
He was looking at the treasurer
issuing bonds for the city and I
was looking at it as a 30-year
lender helping finance projects
and the way you look at
collateral is different from
those two points of view.
So -- and this is clearly pretty
complex and we have heard things
about contingent liabilities for
the cfd and the potential of
creating additional reliability
or risk depending on what we do.
So rather than us make any
decisions tonight, what I would
like to see happen is some more
work around this.
These can be important economic
development tools.
And I would like to know that
your policies are appropriate
that would allow us to use this
and with all due respect to
Councilman Phillips who doesn't
like these, if these districts
made it possible for D.C. Ranch,
Mcdowell mountain ranch and,
some of those beautiful
communities in our city, and the
citizens certainly don't have
any issue buying and telling
their homes, I think it could be
a positive thing for economic
development in our city.
So what I would like to see
happen is the industrial
development authority has a lot
of experience with bonding.
Have them take a look at the
statutes and maybe work through
and say, what does the statute
require?
What is the city's policy with
regard to this?
What do the policies in other
cities to make sure our policies
aren't so restricted that it
becomes a tool that folks
condition use?
But with an eye on what the --
what the risk is to the city for
each of these and watt uses
might be and have them come back
with an overview.
Here's the pro.
Here's the con.
Here's the use.
Here's the policy.
Here's the risk and help us be
better informed before we make
some of these decisions.
That would be my hope.
>> Mayor Lane: thank you,
Councilwoman.
Councilwoman Korte.
>> v. Korte: thank you, mayor.
This revitalization district is
about 4 years old in the state.
Is there any other community
that has utilized this funding
mechanism?
In the state?
>> Mr. Mayor, Councilwoman
Korte, I'm going to defer.
I have heard -- let me defer to
bruce.
i heard of one through bruce.
I'm not -- I'm not certain.
>> City Atty. Washburn: the only
one I know of is there is one in
flagstaff and maybe Mr. Ruby
knows of another.
>> you are right, Mr. Washburn.
There's one in flagstaff.
My understanding is it has not
issued debt.
>> v. Korte: this revitalization
district certainly wasn't
created -- we didn't create the
wheel on this.
Are there other states that have
used this type of mechanism and
how have those states used that?
I think that would be important
for us to look at before we
throw the baby out with the bath
water.
I -- I understand perhaps the
state of florida has used this
type of mechanism often.
I would like to see how that is
used and how it has benefited
the community and economic
development.
And in parallel thinking with
Councilwoman Milhaven, these are
tools.
These are tools that are
important for us to just have in
our tool box, which we use them
or not.
>> Mayor Lane: thank you,
Councilwoman.
I would simply say that I think
simplicity rules here.
If we have mechanisms that have
been used and used successfully,
even if there are some folks who
don't particularly care for the
CFDs and the I.D.S, that I
would -- I'm okay with
continuing those policies
myself.
And frankly, I would just -- we
can study this until the cows
come home, I suppose.
And maybe it is that complex
because this thing has been used
and utilized, I think,
sometimes -- well, it's been
used in flagstaff, I don't know
how successfully if there's no
debt issued.
I'm concerned about the control
issues that the city
relinquishes and for what
reason?
I'm talking about -- now we have
talked an awful lot to the
benefit of the city, but why
would we be turning off --
turning over a section of our
community to someone else's
governance and control outside
of this body where we would not
have any control over it?
When we have mechanisms, you can
call it whatever you want, we
can use it for revitalization,
we can use I.D.A.S, that's
what they are intended for and
in that case we have a, you
know, similar mechanism and we
earn fees from it.
But we maintain control of
private property within our city
limits.
In this case, we relinquish
control of private property to a
district's control, at least in
those areas that I had
mentioned.
so I'm concerned about just
simply that.
And know the circumstances and
how this was developed and why,
and I'm not sure it May have
been mirrored or May have
mimicked some other state or
city across the country, in its
use, but it really hasn't come
into play where this
particular -- the R.D. Now, is
particularly useful outside of
the realm of tools we already
have.
It's just because it's labeled
revitalization, it doesn't mean
it's the only thing that could
facilitate revitalization.
Councilwoman Klapp.
>> s. Klapp: I also would echo
that I believe that we need to
have a policy.
We have got revitalization
districts.
We have no policy.
And I think this body is pretty
biased one way or the other and
I really think a third party,
such as the I.D.A., to take a
look at this.
They are not making a decision,
though.
I think the suggestion to have
them look at this, and to
determine what policies might be
appropriate to recommend to the
council as well as review all
the uses of this district and
other districts and look at
other states and look at how
they could be utilized in our
city is a good thing.
It's still up to the council to
decide what we want to do.
but I think we look rather
foolish, when we have people
come to the city and want to
consider using a district and we
say, well, we don't have any
policies about it.
And so then we try to force them
to go a different direction when
in reality, we encourage
revitalization districts when
the legislation was approved and
so now it seems to me that the
smart move would be to send this
question to the I.D.A. And ask
them to take a look at it.
Come back and give us a report
and discuss with the pros and
cons of whether or not we should
or should not have districts and
what the policy should be.
I think that's just smart
business.
I don't know if we need a
motion.
This is a work study.
>> Mayor Lane: there's no
motion.
>> s. Klapp: I think we are just
giving direction.
So I would -- I would like to
direct staff to do that, to work
with the I.D.A., in coming up
with some -- ask the I. D.A. To
take a look at the districts,
the pros and cons, the
relationship of revitalization
districts to the other two types
of districts that we do have
policies.
Lay out for us why we should or
should not have a revitalization
district policy and if we
should, what is it?
and what should the limitations
be?
I think it was mentioned that
the more we get involved in the
districts, the more our
liability might be.
So it might be good to ask a
third party to discuss this,
rather than us putting our
opinions upon it without in some
cases knowing all the
ramifications of whether or not
it's a good idea to have the
revitalization districts in
scottsdale and if we did, what
should the policies be.
So I would like to ask staff to
do that.
So the city manager and
treasurer work with the I.D.A.
>> Mayor Lane: we can put that
in the form of a directive vote
or to get a consensus on that.
Mr. Behring, did you have a
button pushed here?
>> Mr. Mayor, it was me that
pushed.
I'm sorry.
i pushed your button.
I do that quite often.
>> Mayor Lane: you know how to
push his buttons.
>> I know how to push his
buttons.
That's absolutely correct.
I will take that direction.
The own thing I
only thing I would caution,
it's not something I would feel
comfortable turning off to the
I.D.A.
I think we should work with
them.
i would like to, as a parallel
process use staff to look at the
issue from an internal
perspective.
We will get an external pearle
perspective.
We will get an internal
perspective and marry those two
and bring it back for council's
consideration.
>> s. Klapp: I didn't mean to
imply that you would be separate
from that process.
That would be fine.
>> Mayor Lane: I'm going to say
the idea of having some policies
that revolve around any of these
but for particular district
funding mechanisms is fine and
review of them, I think that's
purposeful and a good thing.
And it May be that the I.D.A. Is
a committee that we can rely
upon to do, that but my greatest
concern in this and this goes
back to staff and to management
and to legal, and that is what
we are doing in the sense of
turning over governance over
city -- over land that's within
the city boundaries and
that's -- that's something that
I think weighs heavily on the
other side and when we talk
about what mechanisms we use,
that this one maybe falls down
the less when we think what we
are trading off in the way of
governance.
I don't think that's something
that the I.D.A. Should be
looking at.
That's not their realm.
We as a policy making body
should be looking at that, on
the best advice from our
professionals sitting there at
the table.
so, you know, I would go with
the motion and I will say that
it's a motion and we will vote
on it from the standpoint of
directive, or direction on that.
I will second that but we do
have -- I'm sorry.
-- maybe just depending what
the city attorney has to say.
>> City Atty. Washburn: I wanted
to point out that the I.D.A. Is
created by statute and has
specified duties.
I haven't looked at the I.D.A.
Statute recently, they are not
an advisory body like most of
our boards and commissions.
That hasn't been said.
I think that it's certainly
possible for staff to work with
them, to, you know, request that
they provide whatever expertise
or input they might have on
this.
So I'm assuming the motion would
essentially encompass the idea
that staff should do whatever
was -- of course, the I.D.A.S
do whatever is in their lawful
authority to assist on this
issue.
>> Mayor Lane: thank you.
just one final comment from my
perspective and I think it's
shared by a couple of other
members here and that is the
great concern over the
governance issue, the control
and how this mechanism could be
used to the detriment of the
city, even if it only besmudges
our reputation and our bond
rating by virtue of a failure of
such a property and that is
something I want to at least be
considered in the entire picture
too.
So with that, a motion and a
second, with those qualifiers on
the guidance.
I think we are then ready to at
least vote on that to see where
on that.
All of those in favor of that
motion as has been expressed
please indicate by aye if you
agree and nay if you oppose.
The motion does pass, 5-2, with
Councilman Littlefield and vice
mayor phillips dissenting.
So that is the guidance and then
that is where we need to be.
We have a few minutes before our
meeting.
So we'll certainly -- I'll take
a motion to adjourn this
particular meeting.
>> r. Littlefield: so moved.
>> second.
>> Mayor Lane: all those in
favor of adjourning the session,
please indicate by aye.
[Chorus of ayes]
We are adjourned.
Thank you.
Thank you, staff.