On May 25, 2010, Councilman Gates made the following motion: 

The City of Phoenix maintain the combined property tax rate for the next two fiscal years (FY 2010-11 and FY 2011-12) at $1.82. The Council agrees that it is important to provide confidence to investors and maintain our excellent credit ratings. Therefore, in FY 2012-2013, if further decreases in property tax valuations require us to do so, the Council will take one of the three actions:

1. Allow the secondary property tax rate to float up;
2. Allow the primary property tax rate to float down; or
3. Use other general fund resources to cover our debt service.

The Council also directs staff to:

1. Delay about $200 million in bond projects as set forth in the 2006 Citizens’ Bond Executive Committee and staff recommendations.
2. Restructure and refinance debt to reduce need to take action in FY 2012-2013 while retaining a nine-month reserve.
3. Monitor City of Phoenix bonds on the open market and if they start selling below par, buy those bonds back, if financially advantageous relative to restructuring and refinancing options (this will further decrease the need to change our policies in FY 2012-2013).
4. Update the Council every six months on what steps are being taken to address this important issue.

The Council asked staff to continue accomplishing these goals through savings, spending cuts, managed competition, or other innovations. The motion was approved by the Council on a 9-0 vote, as recorded in the minutes.

More to come!

Update on Our Hard Won Audit of the City and the Property Tax Dilemma – May 15

Citizens for Phoenix was started in February of 2010 to persuade the City of Phoenix to address its efforts to balance the 2010 -11 city budget by uniting rather than dividing the interests of the citizens, public safety, and city employees.

Thousands of individuals and dozens of community organizations came together under our banner and focused intently on the need for Phoenix management, both elected officials and those employed by the city in management positions, to address some fundamental issues head-on.

The primary problem we faced was that the budget could not be balanced without draconian reductions in both services and personnel across the city which would impact the most vulnerable citizens first.  It was only by accepting the Mayor’s 2% food tax, coupled with those reductions in the budget that the citizens approved, in conjunction with the 3.2% concessions from all of our city unions; that a livable, balanced budget was achieved. Citizens for Phoenix supported, and continue to support, the position taken by the city regarding the need for the food tax during this time of financial crisis.

However, because we are not generally pro-tax, it was this group that demanded as part of our acceptance of the food tax that the city must sunset the tax in 2 years, not the 5 they approved; and that every city department must undergo a best practices audit so that we are never in this position again.

The city council voted on March 2, 2010 to give us the comprehensive audit of the operation of the city as we requested and approved money in the budget to accomplish this. To that end, Requests for Quotes to perform the work of beginning the first audit of many departments have been sent to interested firms.  Because Public Safety (police, fire, prosecutors, and courts) are the largest part of the city’s budget, it was determined that the audit process should begin here.  The returns for the police department audit are being reviewed currently, and the other audits are being solicited.

It is hoped that a thorough audit of the processes, management structure, and staffing as it currently exists, viewed against what is needed to meet service requirements and spans of control; that savings will be revealed that will provide some relief for the budgetary shortfalls that have routinely happened in 9 out of Phoenix’s last 12 budget cycles.  These audits will be reported to a citizen’s oversight committee (See previous post) and ultimately to a City Council Sub-Committee that will oversee it all.