GOVERNING UNCHARTED TERRITORY: Cities and Towns Navigate a Troubled Economy WELDING INC. Stinger welding is the premier major bridge fabricator of the Southwest. Our fast-turn capability and our team focus result in top-quality products completed in record time. Stinger Welding can design, fabricate, deliver, and install bridges and bridge components per specifications ON TIME. Mailing address: PO Box 280 Coolidge, AZ 85228 * 4248 N. Hwy 87 Coolidge, AZ 85228 Tel: 520-723-5383 * 480-987-1630 * Fax: 520-723-7084 General Engineering Class A Contractors License No. 147190 www.deckjoint.com HEALTHIER EMPLOYEES HEALTHIER COMPANY Fight rising health care costs with health. Only Mayo Clinic EmbodyHealth wellness products leverage Mayo medical expertise to improve employee health and reduce health risks that lead to higher health costs. This comprehensive suite empowers employees to identify health risks, change unhealthy behavior, manage conditions and make informed treatment decisions. As your full-service TPA, we can help you create a wellness-focused health plan design, administer your claims and guide you toward healthier numbers. Take your company to a new level of wellness with Mayo Clinic EmbodyHealth. Learn more at www.MayoClinicHealthSolutions.com or call 800.430.9699 Proudly Serving Arizona Cities and Towns Construction Development Agreements Environmental Law Employment Intellectual Property Litigation Open Meeting Procurement Public Finance Real Estate PHOENIX: TUCSON: 201 EAST WASHINGTON STREET, SUITE 800 ONE SOUTH CHURCH AVENUE, SUITE 1900 www.gustlaw.com PHOENIX AZ 85004-2327 TUCSON AZ 85701-1627 602.257.7422 520.628.7070 Published for the League of Arizona Cities and Towns 1820 West Washington Street Phoenix, AZ 85007 Phone: (602) 258-5786 Fax: (602) 253-3874 Web: www.azleague.org EXECUTIVE COMMITTEE President: Boyd Dunn, Mayor, City of Chandler Vice President: Robert E. Walkup, Mayor, City of Tucson Treasurer: Larry Nelson, Mayor, City of Yuma COMMITTEE MEMBERS Marie Lopez Rogers, Mayor, Avondale Doug Von Gausig, Mayor, Clarkdale Gilbert Lopez, Councilmember, Coolidge Byron Jackson, Mayor, Eloy Steve Berman, Mayor, Gilbert Elaine M. Scruggs, Mayor, Glendale Fernando Shipley, Mayor, Globe Jim Cavanaugh, Mayor, Goodyear Monica Badillo, Mayor, Hayden Mark Nexsen, Mayor, Lake Havasu City Scott Smith, Mayor, Mesa Paul Loomis, Mayor, Oro Valley Kenny Evans, Mayor, Payson Bob Barrett, Mayor, Peoria Maria Baier, Councilmember, Phoenix Harvey Skoog, Mayor, Prescott Valley Lynn Skelton, Mayor, Sahuarita Gerry Whipple, Councilmember, Show Low Bob Strain, Mayor, Sierra Vista Mark Mitchell, Councilmember, Tempe Bob Rivera, Mayor, Thatcher LEAGUE STAFF Executive Director: Ken Strobeck Editor: Matt Lore Asst. Editor: Mary Vinzant Design and Layout: Jordan Sinek and Randle Kuehner Published by Naylor, LLC 5950 NW First Place Gainesville, FL 32607 Phone: (800) 369-6220 Fax: (352) 331-3525 Web: www.naylor.com Summer 2009 Departments 06 Message from the President 09 Message from the Executive Director 11 Message from the Governor 20 City/Town Feature San Luis: Where Culture Meets Commerce 23 Spotlight: Former League Executive Director Jack DeBolske 26 How Well Do You Know Arizona’s State Symbols? 28 Index of Advertisers 30 Advertiser.com 12 Features 12 Navigating the Fiscal Crisis: Tested Strategies for Local Leaders An Introduction for Elected Officials 16 Troubled Economic Times Call for New Solutions Arizona’s Cities and Towns Respond to Economic Challenges Publisher: Tracy Tompkins Editor: Thea Galenes Project Manager: Albert Quintero Marketing & Research: Lauren Williams Publication Manager: Krys D’Antonio Account Representatives: Meghan Alty, Debbi Brown, Al Clements, Jim Dielschneider, Julie Gamble, Crystal Hamrick, Norbert Musial, Vicki Sherman, Michael Williams, Cherie Worley Layout and Design: Naylor, LLC Advertising Art: Effie Monson ©2009 Naylor, LLC. All rights reserved. The contents of this publication may not be reproduced by any means, in whole or in part, without the prior written consent of the publisher. 26 16 Published June 2009/LAZ-B0209/8460 On the cover: Image ©www.iStockphoto.com/Benjiecce www.azleague.org 5 Message from the President Much of our earlier successes have hinged upon economic development efforts at the local level. As leaders of the state’s municipalities, we all recognize the effects this current economic crisis has on the local economies of Arizona’s municipalities. We must also understand that we need to work cooperatively, and with a shared vision, to not only survive, but to emerge from this recession with a readiness to quickly and decisively move forward. This issue of Arizona City & Town focuses on our state’s economic challenges and how our actions will lead us out of the current fiscal quagmire we fi nd ourselves in. As I have said in the past, to make this work, we must realize that much of our earlier successes have hinged upon economic development efforts at the local level. A diversified employment base, long-range planning vision, sustainable neighborhoods and the provision of critical services attract and retain the jobs necessary to keep our economy moving forward. And these areas of service need our direction and guidance more than ever. Cities and towns are — and always will be — Arizona’s strongest economic engine. Of course, this will take careful governance as we work to balance our budgets through downsizing and service cuts. Recent months have witnessed unprecedented measures from Arizona cities and towns as a result of the shrinking funds and turbulent economy. In a recent League survey, an overwhelming 80.7 percent of those cities and towns surveyed had implemented hiring freezes, and another 38.6 percent laid off employees. More than 10 percent reduced police and fire department personnel. Nearly all respondents report reductions in their department budgets, and more than 30 percent reported slashing their budgets across the board. We must make difficult decisions in difficult times, but we will persevere. The question remains: When the economy returns, how ready will we be? That will be the test of our leadership capabilities as we navigate this fiscal crisis. Sincerely, Boyd W. Dunn League President Mayor, City of Chandler CSE Insurance Group Since 1949 Since 1946 CSE has been providing quality auto and home insurance to civil servants and their families as well as the general public. Check out our new lower rates in Arizona plus an additional discount for qualifying public employees. For an agent near you please call 1-800-CSE-1220 or connect to us on the web at www.CSEinsurance.com. © 2008 Civil Service Employees Insurance Group 6 409244_CSE.indd 1 Arizona City & Town 11/20/08 11:24:41 AM Printed on recycled paper using soy-based inks. RECYCLE. Your trash. Her treasure. phoenix.disposal.com 428217_AlliedRepublic.indd 1 5/6/09 9:33:12 AM Municipal Engineers and Planners Serving Arizona Communities Since 1994 x x x x x x x x Community Facilities and Improvement Districts Municipal Engineering Plan Review Capital Improvement Plans Road and Streets Maintenance Programs Construction Administration and Inspections Special Financing District Administration Utility Coordination x x x x x x x x Growing Smarter General Plans Strategic Planning Development and Zoning Codes Subdivision Codes and Design Guidelines Emergency Preparedness Programming Public Participation Programs Public Meeting Facilitation Engineering Standards 1626 N. Litchfield Road, Suite 310, Goodyear, AZ 85395 Phone (623) 547-4661 Fax (623) 547-4662 For more information, email larry@scoutten.com www.azleague.org 422670_WCScoutten.indd 1 3/13/09 12:53:37 PM 7 Ranked #1 in Arizona Construction. CORE Construction Services of AZ, Inc. 3036 East Greenway Road Phoenix, AZ 85032-4414 P: 602-494-0800 www.COREConstruct.com Arizona Florida Illinois Nevada Texas 423725_CORE.indd 1 3/30/09 6:40:43 PM u deal with the cost of growth? How do yo www.tischlerbise.com • (800) 424-4318 OUR ARIZONA CLIENTS INCLUDE: Q Development Fees (over 700) Q Fiscal Impact Analysis (over 600) Q Utility Rate Studies Q Revenue Strategies Q Capital Improvement Plans Q Fiscal Software 8 419968_Tischler.indd 1 • Apache County • Apache Junction • Avondale • Buckeye • Bullhead • Camp Verde • Carefree • Casa Grande • Cave Creek • Cochise Co. • Coolidge • El Mirage • Eloy • Flagstaff • Fort Mojave Fire Dist. • Glendale • Goodyear • Lake Havasu City • Maricopa • Navajo Co. • Northwest Fire Dist. • Peoria • Pinal Co. • Pinetop-Lakeside • Prescott • Queen Creek • Sahuarita • Scottsdale • Sedona • Show Low • Sierra Vista • Snowflake • Springerville • Surprise • Taylor • Yuma Arizona City & Town 3/24/09 2:30:32 PM Message from the Executive Director We operate in a world where there aren’t clear-cut good and bad choices. www.azleague.org 423477_Tyler.indd 1 Don’t you sometimes wish there was a way to assemble all the good ideas and alternatives about a particular topic in one location? If you had an exhaustive list of choices relating to balancing your budget, for example, and they were all in order from best to worst choice, maybe getting through our current economic problems wouldn’t be such a challenge. Unfortunately, for those of us who live in the real world, there are no simple, one-stop sources for all the good ideas. I remember a critic once told me that being a legislator was one of the easiest jobs in the world. “All you have to do,” he said, “is vote for the good bills and vote against the bad bills. What’s so hard about that?” This was spoken like someone who has never been forced to choose between two good alternatives, to eliminate one and keep the other. As city and town leaders, we operate in a world where there are no clear-cut good and bad choices. We are fortunate, however, that we do not live in a vacuum where each community has to completely start from ground zero to solve problems. This issue of Arizona City & Town contains some thought-provoking ideas you may not have considered before. Also, at the League Annual Conference in Oro Valley this September 1-4, there will be dozens of education sessions — many of them focused on budget and management issues — where each of us can learn from one another and where you can share some of the creative ideas your city or town has come up with. Adversity forces us to be resourceful and operate more efficiently. There is a quote attributed to George Bernard Shaw that says, “If you have an apple and I have an apple and we exchange these apples, then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.” The League, and as an extension this magazine and the annual conference, provides a forum for the exchange of ideas and solutions that will help us all to navigate these troubled economic times. Sincerely, Ken Strobeck Executive Director 3/17/09 7:43:23 PM 9 A Tradition of Excellence • Elections • Open Meeting Law • Code Revisions • Zoning • Public Records • Construction • Personnel and Personnel Policies • Conflicts • Cell Tower Siting • Water, Sewer, Power • Cable TV • Sales Tax Collection • FACTAct Compliance Assisting Arizona’s city and town attorneys. We can help! 501 East Thomas Road, Phoenix, Arizona 85012 Contact Susan Goodwin (602) 393-1700 www.cgsuslaw.com 423790_Curtis.indd 1 4/17/09 9:38:51 AM Celebrating 75 years of building Arizona BURGESS & NIPLE Engineers n Geologists n Planners Since 1912 Our expertise includes: n Water n Wastewater n Water Resources n Transportation n Bridge Inspection n Improvement Districts 1500 N. Priest Drive | Suite 101 | Tempe, AZ 85281 602.244.8100 burgessniple.com 10 419532_Burgess.indd 1 2/18/09 6:46:32 PM 426441_Associated.indd 1 Arizona City & Town 4/16/09 11:11:22 AM Message from the Governor We must modernize our tax structure; I want tax reductions starting in 2012. A Dose of Reality Helped California, and it Can Help Arizona, Too Nearly 40 years ago, Ronald Reagan became California’s governor and immediately faced an historically large budget deficit. “We are going to squeeze and cut and trim until we reduce the cost of government,” he said. “It won’t be easy, nor will it be pleasant, and it will involve every department of government.” But that still left a deficit, so Reagan proposed a $1 billion tax hike. The result was an economic revival. In the past, Arizona, too, only pretended to balance the budget. The previous administration assumed our state’s economy would grow 8 percent. It declined by 12 percent instead. The previous administration used money it hoped to get next month to pay bills today; then it announced that a rich friend in Washington, D.C., would be mailing us a check — and the administration spent that, too. Well, Reagan didn’t play that game, and I won’t either. I can only pray for a fraction of his greatness, but as I said when I was sworn in, the party is over. Even though I’ve just arrived, I’m going to pay the bill and do it honestly, using a five-point plan, outlined below. • Step one: I’m going to squeeze. I’m going to trim. I’m going to cut spending. And we shouldn’t spend money that belongs to someone else. As you know, I ordered every state agency to plan for cuts of 5 percent, 10 percent, 15 percent and 20 percent. As you can imagine, it wasn’t pretty. But neither is red ink. Armed with a realistic picture, we can make tough but informed decisions. • Step two: Stop creating — or expanding — programs we cannot afford. Ask voters to improve the Voter Protection Act. It’s a noble program, but it ties our hands. Among other things, it mandates $20 million to stop urban sprawl. To state the obvious, we don’t have an urban sprawl problem right now. • Step three: Stop digging a hole. If we keep spending at our current rate and take all that hot-off-the-presses stimulus money from Washington, our $3 billion deficit this year will accumulate to $13 billion by 2014. • Step four: Modernize our tax structure. I want tax reductions starting in 2012, and we need progressive tax reforms to encourage investment and create high-wage, sustainable jobs. • Step five: Anyone who followed my career knows I am as faithful to Reagan’s principles as I am to my husband, my family and my church. But just as Reagan did in 1967, I have reluctantly concluded that spending cuts alone won’t get it done. We need a temporary tax increase until we stabilize government. After we’ve cleaned up the mess, it will expire. Then we can look toward reducing and reforming our tax burden. Sincerely, Janice K. Brewer Governor of Arizona Water & Wastewater Alternative Procurement Specialists Design Builders Fann Environmental  Construction Manager @ Risk  Design Build  Job Order Contracting E In-House Design E Contract O&M E Single Point of Responsibility E FANN ENVIRONMENTAL, LLC DESIGN BUILDERS [ CALL TODAY: 928-778-5335 www.azleague.org 404897_FANN.indd 1 10/28/08 9:08:36 AM 11 Navigating the Fiscal Crisis: Tested Strategies for Local Leaders ©www.iStockphoto.com/scotspencer An Introduction for Elected Officials BY GERALD J. MILLER, PH.D., AND JAMES H. SVARA, PH.D. PROFESSORS, SCHOOL OF PUBLIC AFFAIRS ARIZONA STATE UNIVERSITY As the fiscal crisis around the country threatens more and more local governments, officials are faced with increasing challenges and a need for immediate action. The vision and the leadership of elected officials are key to sustaining local governments through this crisis. To determine the lessons of past experience and assess the current situation, the International City/County Management Association (ICMA) commissioned a white paper prepared by researchers from the Academic Network of the Alliance for Innovation — a partnership that includes Arizona State University. This summary provides the white paper’s findings and arguments with a special emphasis of the contribution that elected officials can make in responding to the fiscal crisis. The complete white paper with supporting research papers can be found at the following Web site: www.transformgov.org/files/ whitepaper/Navigating_the_Fiscal_Crisis.pdf. Fiscal Dimensions of the Economic Crisis There is variation among cities and counties in Arizona, but most local governments are experiencing the effects of the fiscal crisis. In many other states, the impact may be felt later. The housing construction industries have experienced slowdowns that result in higher unemployment, reduced housing-related sales tax revenues and reduced revenues from building permits and related fees. The ripple effect from these slowdowns touches related businesses, including suppliers, restaurants and stores. The decrease in purchasing produces a decrease in general sales tax revenues. The global dimensions of the financial crisis have decreased the demand for United States’ exports. Foreclosures are particularly serious in Arizona and are expected to continue. Unemployment will force additional people who live paycheck-to-paycheck into foreclosure. Foreclosures cost local governments due to increased property maintenance, crime and such social issues as homelessness. As property values drop from foreclosures and the declining housing market in general, property tax revenues will decrease. The tightening of credit due to the crisis in the financial markets has made it much more costly and difficult for local governments to borrow money to finance capital projects. Because the stock market has sustained major losses and pensions are funded in large part by stocks, the cost of local government obligations to pay pensions could have a substantial effect on local governments. Officials should have a clear understanding of how their system works. A specific local government may encounter any combination of these conditions that contribute to fiscal distress, and the timing may differ. It is imperative that elected officials seek a full and frank assessment of the current conditions and likely trends for the next two years. The federal government’s stimulus program will start adding jobs and improvements in public works, neighborhood stabilization, energy efficiency and other areas, but local governments need to take a long-term approach to responding to cuts and building for improved performance in the future. www.azleague.org What Worked in Previous Cutback Efforts? In times of fiscal crisis, citizens look to elected officials for answers, and these officials can fill an important educational role. Working with staff members, they can educate the public, solicit their input and engage them in problem-solving. They can provide information to the public about the issues, the financial impact and the possible programmatic changes that will be required. Local governments must have the flexibility to suspend practices that are no longer adequate and thoughtfully consider and apply other solutions Although an immediate response to a major budget shortfall is to stop spending and introduce across-the-board cuts, research shows that other approaches may be more effective in sustaining a local government over time when it is faced with a serious and prolonged downturn. • Make any cuts sensible and understandable to the public. • Maintain revenues to support essential expenditure levels, because these actions have a greater positive impact in speeding economic recovery than cutting expenditures. • Consider the value of a service before cutting it. Across-the-board cuts do not differentiate essential from non-essential services. When cost-cutting measures are being considered, it is important to also consider the value of the service to the local government’s core mission and the impact of cutting it. • Refrain from deferring maintenance or moving money around for short-run expediencies. Remember that one-time cuts help immediately but do not save more money in subsequent years like cuts in continuing expenses do. • Hiring freezes create a pool of unfilled positions, but simply eliminating empty positions weakens organizational performance. It is better to target elimination of lessneeded positions and try to move affected staff members into vacant positions providing essential services and programs. • Layoffs will affect the local economy due to reduced spending and other financial effects that unemployment can introduce. Where possible, alternatives such as early 13 Feature Article: Navigating the Fiscal Crisis: Tested Strategies for Local Kitchell TOGETHER, BUILDING VALUE EVERY DAY. retirements, reduced hours or redefined jobs are preferable. Bring contracted services back in-house to be performed by staff members in order to save money and jobs. What Elected Officials Can Do SINCE 1950, KITCHELL HAS BEEN WORKING WITH PUBLIC CLIENTS TO BUILD BETTER COMMUNITIES. Big League Dreams Sportspark Phoenix Convention Center East Valley Bus Operations and Maintenance Facility Program/Construction Management Facility/Needs Assessments Commissioning Mohave #08G-KCEM-1208 ADOA #EPS080009-16 Contact Karen Heck 602.266.1970 kheck@kitchell.com www.kitchell.com 14 423467_Kitchell.indd 1 4/7/09 8:15:41 PM Local officials can convey the message to citizens and staff that all programs are on the table facing evaluation and possible cuts. It is likely that programs have constituencies that support them, but elected officials need to help citizens understand that programs must meet the highest needs in order to justify continuation at current levels. They can make sure that citizens get their questions answered and understand the budget review process, but they create confusion by promising individuals that their services will remain the same or trying to give special treatment. Elected officials should expect as much information as possible from staff about options and consequences of specific cuts. Ultimately, they must weigh the long-term interests of the community as a whole in making the final decisions about cuts. Elected officials should backup city managers and give them the authority and the support to act decisively and coherently. They should monitor effectiveness and look for adjustments in the methods used to accomplish the strategies. Why Innovation is Critical Periods of fiscal stress can be times of innovation and creativity. Innovation brings about new approaches to problemsolving. In a cutback period, the resources are not sufficient to maintain the status quo. More than ever, local governments must have the flexibility to suspend practices that are no longer adequate and thoughtfully consider and apply other solutions. Providing incentives for improving performance will encourage staff members to think creatively and become part of the solution. Here are actions local governments can take and elected officials can support that promote constructive change: • Focus on core mission, purpose and highest priorities in order to differentiate essential services from others. • S u p p o r t s t a f f i n t r y i n g n ew approaches and improving organizational design and processes. • Commit to communicating with all stakeholders. What Elected Officials Can Do Elected officials’ leadership in encouraging a long-term perspective, rather than a short-term reactive stance, will be essential to effective management of this crisis. The elected officials’ role in educating and engaging all stakeholders in solving the problems facing our communities will support their long-term vitality and stability. They can reinforce the message that innovations are encouraged despite the risks. How Local Governments Contribute to the Economic Recovery L o c a l g ove r n m e nt s a r e i m p o rtant economic agents. Because they make substantial purchases of goods and services and have employees who buy products and pay rent or mortgages, local governments contribute to the economic Arizona City & Town Leaders well-being of a community. Although tax cuts are an option, they are typically not large enough to make a discernable impact on the local economy. There are several strategies local leaders can implement to mitigate fiscal stress or even mildly stimulate the economy. Elected officials’ leadership in championing these efforts is essential. • It’s important to maintain or increase local gover nment expendit ures by continuing or increasing revenues or drawing down financial reserves. • Expand or accelerate capital projects, especially those with low operating costs. These projects put money into the economy because they have a direct relationship to business and industry. • Although it seems counter-intuitive, economic literature suggests that cutting expenditures hurts local economic recovery more than maintaining or raising current tax levels. What Elected Officials Can Do By educating citizens on how 5/7/09 12:26:35 AM the actions of local governments428256_Wedbush.indd 1 impact the economic cycle and Proud to Serve Arizona since 1983 the value of sensible budget decisions that sustain needed programs and services, elected of ficials ca n help citizen s Leading the Way in Arizona. understand how local governYour community deserves the finest in municipal wastewater ment actions support the local and water management. A public-private partnership with economy. Summary Elected of ficial s have t he responsibility to govern their communities wisely and link residents to the governmental process. The current fiscal crisis that is threatening local governments makes these tasks harder but even more important. Citizens look to elected officials to address serious problems, not just hunker down and wait out the storm. Officials should focus resources on the most important programs and services and encourage changes that will make communities stronger in the future. They are in a unique position to engage citizens and to provide the leadership that inspires confidence and trust. ● www.azleague.org Severn Trent Services can provide the expertise gained through more than 30 years of experience operating, maintaining, servicing and managing utilities. Our dedication to innovation, efficiency and quality creates the perfect combination for managing your facilities. Currently, over 400 communities nationwide rely on Severn Trent for the provision of their water and wastewater management. That’s why a number of Arizona communities have successfully partnered with Severn Trent. To learn how your community can benefit from a public-private partnership with Severn Trent, contact us today. Relax. Severn Trent Services has you covered. Ed Schwab Client Relations 719 475-2258 eschwab@stes.com 406650_Severn.indd 1 Fred Kriess, Jr. Senior Area Manager 623 572-9550 fkriess@stes.com www.severntrentservices.com 15 11/17/08 11:31:18 AM Troubled Economic Times Call for New Solutions Arizona’s Cities and Towns Respond to Economic Challenges It’s BY MARY VINZANT COMMUNICATION AND EDUCATION ASSISTANT LEAGUE OF ARIZONA CITIES AND TOWNS 16 no secret that news of the economy is grim. In these extraordinary times, all levels of government are being forced to employ unprecedented money-saving measures to manage fiscal challenges. Cities and towns in Arizona face particularly exigent circumstances as they work to balance their budgets with continually declining general fund revenues, which include shared revenue, local sales tax and property tax, among other revenue sources. A recent survey conducted by the League of Arizona Cities and Towns shows municipalities in Arizona are feeling the crunch. The survey was distributed to Arizona’s 90 incorporated cities and towns in March 2009, and a total of 57 participated. More than 80 percent of those reporting experienced a sharp decline in general fund revenues for the fiscal year (FY) 2009, as compared to FY08, with an average decline in revenue of 10.3 percent. Moreover, 86 percent of cities and towns projected that their FY10 revenues would continue to fall from FY09 levels at an average rate of 10.1 percent. Arizona City & Town How Cities and Towns are Responding When asked what they had done to address the current economic situation, an overwhelming 80.7 percent of cities and towns implemented hiring freezes and another 38.6 percent laid off employees. More than 10 percent reduced police and fire department personnel. Nearly all respondents reported reductions in their department budgets, and more than 30 percent reported slashing their budgets across the board. Impacts of the dwindling revenues can be seen statewide. From Flagstaff to Goodyear to Scottsdale, several cities and towns across Arizona have been forced to lay off employees or introduce early retirement incentive programs. hourly employees working 36 hours and salaried and public safety employees taking a 10 percent reduction in pay. “Like all cities and towns in Arizona, Clarkdale is striving to strike a balance between providing quality and necessary services to our citizens while dealing with unprecedented revenue declines,” she said. A number of other communities have also implemented four-day work weeks, including the City of Avondale, the Town of Queen Creek and the City of Mesa. Of those surveyed, 29.8 percent of cities and towns reported reducing various operating hours. Percentage of cities and towns that reduced various operating hours Percentage of cities and towns that laid off personnel 38.6% 70.2% 29.8% 61.4% 17 of the 57 reporting cities/towns reduced operating hours. 22 of the 57 reporting cities/towns laid off personnel. *This survey was conducted in March. Since that time, several other communities have laid off personnel. Percentage of cities and towns that experienced decline in FY09 general fund revenues 82.5% 17.5% (Average decline: 10.3%) 57 cities/towns responded to this question. www.azleague.org For some, cuts began as early as 2007. “When shifts in the economy started to become evident in October 2007, the Town of Clarkdale began holding positions vacant whenever attrition occurred and has continued to do so,” said Town Manager Gayle Mabery of Clarkdale, Ariz. “Budgets were cut in all departments, and no new programs or services have been instituted since that time.” Through attrition and vacancies, the tow n has reduced personnel by six positions, or 10.9 percent of their staff. Four early retirements were also approved through Clarkdale’s newly adopted Voluntar y Early Retirement Incentive Program. Mabery said when revenues continued to decline, the town implemented a four-day work week, with “When we realized we had a longterm problem, we acted quickly,” said Mesa Mayor Scott Smith. “We knew the sooner we acted, the greater the chance we had at heading it off.” For Mesa, t he ch a nges mea nt a reduced budget for FY08-09 that cut approximately $15.8 million and 133 positions from existing service. Additionally, reductions were made in general fund allocations to public safety services, totaling $4.5 million. Smith said that as the economic contraction continued in the fall of 2008, the city and council were forced to cut an additional $60 million and 340 positions from current year services that are funded by general fund resources. Gayle Whittle, finance director for Lake Havasu City, Ariz., reported that the city had laid off 20 full-time and 18 pa r t-time employees, eliminated 17 425256_Achen.indd 1 4/1/09 8:24:41 PM Ordinance Codification Programs "SJ[POBmT$IPJDFGPS#POE$PVOTFM Code Updates • New Codes • Legal Reviews Model Ordinances • Codes on CD and Internet With more than 100 years of collective experience, Squire Sanders Experience and Quality has been Arizona’s top choice for public finance law for 30 years. For nine years straight, we have been ranked No.1 in dollar volume as bond counsel in Arizona. That’s because we offer creative, value-added legal services that get results in the public finance arena. Squire, Sanders & Dempsey LLP 40 N. Central Avenue, Suite 2700 Phoenix, Arizona 85004-4498 +1.602.528.4000 No one knows Arizona municipalities better than the League, and American Legal Publishing assists nearly 2,000 municipal and county clients across the country with their ordinance codification needs. Contact Ray Bolhauer or Rich Frommeyer at: (800) 445-5588 rbollhauer@amlegal.com • rfrommeyer@amlegal.com A joint service with: XXXTTEDPN 18 427340_Squire.indd 1 www.amlegal.com 4/23/09 11:00:15 AmericanLegal.indd AM 1 Arizona City & Town 5/12/09 8:39:27 AM Feature Article: Troubled Economic Times Call for New Solutions 21 unfilled positions and approved 11 early retirements under its Defer red Retirement Option Program. Remaining person nel sala ries were reduced by 5 percent. According to Whittle, parks maintenance, recreation programs and development services were among the hardest hit. “Public safety cuts were the last ones made,” Whittle said. “Currently, public safety makes up 60 percent of our proposed general fund budget, whereas local sales tax generates 38 percent of our general fund revenues. By comparison, in 2003, which is the level our revenues have dropped to, our public safety budgets made up 51 percent of our general fund expenditures, and local sales tax made up 48 percent of our revenues.” Still other communities have reduced benefit s. For exa mple, t he Cit y of Somerton approved budget cuts that will eliminate paid holidays for city employees and result in a pay decrease for firefighters and police. Fiscal challenges give cities and towns the chance to evaluate their core services and how to provide them efficiently. Innovative Cost-cutting Strategies As cities and towns grapple with shrin king f u nds, W hittle suggested that the fiscal challenges may provide an opportunity for cities and towns to evaluate their core services and how to provide them efficiently. “You can’t afford to have departmental silos,” Whittle said. “Everyone has to work together and share staff across departmental lines as much as possible. Furthermore, use your colleague networks to get ideas you can implement in your jurisdiction.” Before the budget process, Whittle said t he cit y bega n a n i nter nal cost-for-services study with all of its departments and requested that the city council determine priority areas. “We examined every program, and the council decided which programs www.azleague.org had priority and [should be funded]; which should only be provided if we recovered the full cost; which we should eliminate because it was a duplication of another program provided to the citizens by another entity; and which should be eliminated because it served only a small portion of the community,” Whittle said. In addition to Lake Havasu City, more than 70 percent of survey participants had made targeted cuts to expenditures, including various departments, programs and personnel. Percentage of cities and towns that made targeted budget cuts 70.1% 29.9% 40 of the 57 reporting cities/towns made targeted cuts. Like Whittle, Mabery saw the economic climate as an opportunity to reevaluate. “The reduction in staffing levels that Clarkdale has experienced over the past two years has allowed us to look at our use of space in a whole new way,” Mabery said. The town recently terminated its lease for office space, allowing Clarkdale to absorb its entire staff into space the town already owns, thereby eliminating lease expense. The result? “Approximately 70 percent of our staff relocated to new offices, resulting in higher levels of efficiency between departments and better access and services for our citizens,” Mabery explained. Early Reactions and Results In the wake of the necessary reductions, Whittle, Mabery and Smith shared their preliminary results. “Employees have been mostly supportive,” Whittle said. “They want to save jobs, so they have been willing to pitch in.” Furthermore, estimates show that Lake Havasu City’s solutions have been effective in managing the revenue shortfalls. “Our preliminary estimates show we have reduced general fund expenditures by 22 percent from the current year’s budget and 12 percent from last year actuals, with another 2 percent to go to reach our target to balance revenues and expenditures,” she said. “This assumes that revenues come in close to our very conservative estimates and don’t fall further.” Mabery experienced a similar reaction from employees and citizens. “The Clarkdale Town Council, citizens and employees were overwhelmingly supportive of adopting the modified work schedule in order to prevent Reductions in Force,” Mabery said. “Citizens were surveyed prior to implementing the fourday work schedule and saw it as a very effective approach to dealing with the budget shortfalls.” In addition, Cla rkdale created a significant public outreach program to encourage citizen participation in its budget process. As part of the program, Clarkdale conducted a series of trial budget workshops in April to garner input from citizens on the FY10 budget. “Clarkdale considers the steps we are taking today not as temporary steps to get through a bump in the road, but as long-term adjustments in order to deal with the new economic reality,” Maybery explained. Smith noted that Mesa’s budget cuts have resulted in decreased operational costs and, unfortunately, a more than 10 percent reduction in its active workforce. “The good news among the bad is that by acting quickly and making tough decisions, we have positioned ourselves to be able to look for economic development opportunities,” he said. “Through partnering with the state, we can help Arizona pull out of this downturn as soon as possible by creating more jobs and building a better business environment.” ● Editor’s note: The League survey was distributed to the state’s 90 incorporated municipalities in March 2009. Results were tabulated by League staff. Since that time, a number of other municipalities have been forced to implement further cuts and/or reductions in staff. 19 City/Town Feature San Luis, Arizona Where Culture Meets Commerce BY KARIN MEZA CITY OF SAN LUIS PUBLIC INFORMATION OFFICE The city of San Luis was established in 1930. It was a port of entry to the Sonoran town of San Luis Rio Colorado. San Luis was built largely by agricultural workers, with about half of the population hailing from Mexico. San Luis was incorporated in 1979, and by 1980, approximately 2,000 residents resided in San Luis, increasing to 15,000 by the 1990s. Currently, the population is just under 30,000 and is projected to double in size over the next decade. Today, San Luis is the fastest-growing small city in Arizona, with a sustained annual growth rate of 8 percent. In anticipation of continued growth, development and diversification, San Luis continues to expand its city’s horizons. San Luis is located at the southwest corner of Arizona, along the border of San Luis Rio Colorado, Mexico, and California. The city is a mere 70 miles from the white beaches of El Golfo de Santa Clara. More than 500,000 people live within an hour’s drive of the city. This makes this unique community excel in rich heritage and culture appeal. Annual Founders’ Day Parade 20 Border Commerce Already the second-busiest border crossing point in Arizona, an additional, wholly commercial San Luis port of entry will open in fall 2009. The port will directly connect the Mexican states of Sinaloa and Sonora with major U.S. markets, including Los Angeles, San Diego and Phoenix. Construction is also underway on the Area Service Highway, which will connect the new port to Interstate-8. San Luis looks forward to celebrating the opening of the new San Luis Port of Entry II in the fall. It is the first new port of entry constructed in Arizona in 30 years. San Luis’ appeal extends to the abundance of affordable housing and a quality of life that is essential to attracting new business and industry. The city’s industrial base is expanding dramatically with the current amplification of the existing industrial park and the construction of a brand new park located at the new international commercial port of entry in east San Luis. This new industrial complex will usher in new businesses, convenience stores, offices, apartment complexes and other services. The local economy is transitioning from agriculture and food processing to construction, light manufacturing, warehousing and distribution. Manufacturers on both sides of the border are taking advantage of the area’s “Empowerment Zone” designation. In 2007, the San Luis I International Port of Entry processed 2,481,013 northbound private vehicles and 2,798,782 northbound pedestrians. In the commercial arena, 69,767 northbound and southbound trucks were processed through the port. The border region between Yuma County, Arizona, and San Luis Rio Colorado, Sonora, is a thriving bi-national and bi-cultural area. With the extensive and updated support infrastructure, the border region is a prime location for bi-national industrial development. Although agriculture is San Luis’ most significant industry, several large new employers have moved in. Wal-Mart joined the Arizona City & Town City/Town Feature community in March 2008, creating new jobs. An in-bound call center and a federal detention center recently opened, as well. San Luis’ appeal also extends to the abundance of affordable housing and a quality of life that is essential to attracting new business and industry. Although local communities are seeing declines in new home start-ups, ranging from 20 to 60 percent in some cases, San Luis has seen a moderate decrease of only about 5 percent. Four new subdivisions were approved and are under construction, with additional subdivisions planned in coming years. All of the housing projected for the future will be necessary to provide for an ever-expanding population and job base. Where Culture Meets Commerce In 2008, San Luis opened its new state-of-the-art municipal complex to better serve its growing community. The three new buildings consist of City Hall offices with a breathtaking Council Chamber, a new police building and fire station. “Where Culture Meets Commerce” is the new tag line for the fast-growing city of San Luis. In an effort to re-brand the city and create a new image consistent with its future outlook, San Luis unveiled a new redesigned Web site created with the end-user in mind. The city also launched a media campaign to address the recruitment of new businesses and support commercial growth and investment. San Luis has always had a great sense of community pride and enjoys its citizens’ involvement in community events. San Luis hosts many special events during the year, including its annual Fourth of July celebration weekend and the traditional Cesar Chavez Parade and Founders’ Day celebration. “We have a great sense of community closeness, and the elected officials of the city really enjoy participating in all of the city events,” said San Luis Mayor Juan Carlos Escamilla. “These events are a great way to bring the community together.” This year, San Luis will be celebrating the 30th anniversary of its founding, honoring those who laid the groundwork for a strong community and celebrating the past and the present. San Luis’ rich heritage and cultural appeal make it a unique community. To learn more about San Luis, visit www.cityofsanluis.org. ● Providing Investment Management Services to the Public Sector for Over 28 Years • $34 billion of Public Sector Assets under Management • Individual Portfolio Management for General Funds and Bond Proceeds For additional information contact: Lauren Brant Managing Director 2375 E. Camelback Road Suite 5118 Phoenix, AZ 85016 (602) 387-5187 www.azleague.org 422051_Public.indd 1 3/6/09 6:10:25426067_CAP.indd PM 1 21 4/17/09 7:13:01 PM Building Financial Success Since 1931 F or over 75 years, Stone & Youngberg has structured and underwritten municipal debt for a PUBLIC FINANCING SOLUTIONS FOR: Cities, Towns and Counties diverse mixture of public agencies. 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OfÞces throughout the US ¥ pbsj.com ¥ 480.419.7275 22 420048_PBSJ.indd 1 410475_Shephard.indd 1 2/18/09 7:43:25 PM 800.292.1061 Arizona City & Town 12/3/08 12:25:45 PM Spotlight Jack DeBolske Former Executive Director League of Arizona Cities and Towns Jack DeBolske was the League’s executive director for 40 years (1957-1997). It can be argued that no other person in our state has had as great an impact on local governments than he. For the last year, Jack and former Executive Director Cathy Connolly have been coming in to the League offices weekly to compile archival information about the League for a historical publication. (A draft of this historical document will be available soon.) While Jack was on hand recently, the editors had the opportunity to sit down with him and ask him some questions about his tenure at the League. Q: What accomplishment, or accomplishments, are you most proud of during your tenure as executive director? A: First is the state revenue sharing package, which provides cities and towns with a reliable revenue base. Those initiatives (1960 sales tax initiative and 1972 income tax initiative) took lots of work by city and town officials and the League, but in the end, I am sure we all think they were worth it. Another proud accomplishment is the groundwater code, which was passed in 1980 after many years of negotiation. The code gave cities and towns a prominent place in the allocation of groundwater. At the time, the farmers and the mines still had a great deal of clout at the Legislature, and the interests of cities and towns on water conflicted with the farming and mining goals. Passage of the groundwater code was also the key to federal funding of the Central Arizona Project. La st, but cer tainly not lea st, is the “incorporation in urbanized area law” — better known as the 3 mile/6 mile rule — which the Legislature passed at the League’s urging in 1961. That law allowed our existing cities and towns to grow without the emergence of many small communities on their borders. In the final analysis, that law played a key role in the development of our state, particularly of our major metropolitan areas. www.azleague.org Jack DeBolske (left) and former Governor John R. “Jack” Williams playing a game of chess in the newly built League building in 1973. Jack DeBolske (third from left) and a group of Executive Committee members on an Air Force-sponsored trip in 1967. 23 Q: What are the biggest changes in cities and towns that you have noticed since the time you were at the League? A: One of the biggest changes is how cities and towns communicate with their citizens, each other and outside private, as well as public, organizations. The whole gamut of communication has changed in the last decade or so. The world was a different place without computers, Web sites, cell phones and e-mail. Q: What are the big- gest changes in the State Legislature since you were at the League? A: Carol Anderson, former Mayor of Kingman, past League President Jack DeBolske and former Governor Fife Symington at a bill signing in 1991. Since 1997 when I retired, the Legislature has become much more partisan. Term limits have resulted in a lack of long-term policy leadership in both parties and more single-issue legislators. During my tenure, there may have been battles in committees or on the House or Senate floors, but after the session, members could shake hands and go have a beer or other liquid refreshment because they respected each other. Q: What advice would you give a young city manager today? A: Arizona has a strong history of the council-manager form of government, and we are fortunate to have this professionalism in our local governments. For a young person entering the field, I would advise them to have patience in trying to change things. Incremental change is, in my opinion, less disruptive and more successful. But it is always important in any field to have long-term goals, and that is true of city management as well. The financial troubles facing all levels of government today will pass, and perhaps our local governments will be stronger for having to ride this storm out. Q: What were the greatest chal- lenges for cities and towns when you started as executive director? IN THE HEAT OF CHALLENGE, WE ENGINEER THE RIGHT SOLUTION. Engineering Possibilities A: The League did not have a service program or much else in place when I arrived in Arizona in 1957 to begin my tenure as executive director of the League. They also did not have much of a presence at the Legislature. Starting the service program and earning the respect of legislators were my initial goals. for Arizona Burns & McDonnell customizes solutions with regional expertise in municipal water and wastewater treatment, air quality control systems, coal-fired and gas power generation, and aviation and military facilities. Engineering, Architecture, Construction, Environmental and Consulting Solutions www.burnsmcd.com/phoenix 24 380981_Burns.indd 1 5/5/08 6:54:50 PM A 1972 Phoenix Gazette cartoon after a city revenue sharing bill failed during the final hours of that year’s legislative session. In response, the League launched its successful 1972 citizen initiative on urban revenue sharing. Arizona City & Town Spotlight Q: What were the greatest challenges for cities and towns when you retired? A: It was a very different state and situation for local governments when I retired 40 years later. Many factors could be mentioned, but probably at the heart of the difference was the explosion of population growth and the resulting demand for more and different services. Financing is always a challenge, which is why we pursued the initiatives for revenue sharing. Q: What are your fondest memories of your time at the League? A: Traveling around the state to visit individual communities to talk with city and town councils and staff are my fondest memories. I really loved those road trips in the summer to do Mayor and Council Institutes. Also, I must mention the exceptionally fine men and women who served as mayors and councilmembers for their communities. Arizona has been blessed with strong and effective local government leaders, and it was an honor and pleasure to work for them. 8dbZiVa`idjh# NdjcZZYVgZa^VWaZ!ZmeZg^ZcXZYeVgicZg[dgndjgXdc" higjXi^dcegd_ZXih#DjgWZhiegVXi^XZhVcYZmeZg^ZcXZY iZVbbZVci]Vii]ZWZiiZgVaiZgcVi^kZhndjÉgZb^hh^c\ Q: Does the League still fill an impor- XVcWZ[djcY^cdcZeaVXZÄLZ^io# tant role for cities and towns today? A: We learned a long time ago — and it is really why the League was formed — the value of cities and towns working together toward common goals. The old adage is if you don’t hang together, you surely will hang separately. There is a continuing need for an organization to provide the framework for that sense of responsibility and togetherness, and that organization is the League. ●