SedonaEye.com columnist Eddie Maddock

Sedona AZ (June 4, 2014) – June in Sedona represents the countdown to the beginning of 2014-15 fiscal year commencing July 1, 2014.

Hot topics such as finalizing the Chamber of Commerce destination marketing campaign, refinancing of the City’s existing 2004 Excise Tax Revenue Refunding Obligations, new monthly wastewater rates and wastewater capacity fees, and approval of the Tentative City Budget for the upcoming fiscal year have been agenda items at recent Regular and Special City Council Meetings.

At the Regular Council Meeting held May 13, Chamber President and CEO Jennifer Wesselhoff presented an overhead review explaining their proposal for marketing Sedona to outside cities, states, and countries. Apparently lacking in their own expertise, the Chamber hired a full service Phoenix marketing firm, Owens Harkey & Associates, to assist with the proposal. Ms. Wesselhoff during the discussion referred to future plans for hiring a professional PR firm for marketing product development in addition to referencing a Mitch Nichols of Nichols Tourism Group with whom the Chamber is also presently under contract to work through this process.

Of course, since Requests for Proposals were not offered for this Destination Marketing service there’s no way of ascertaining if a legitimate, qualified firm would have required additional consulting services had they been given the opportunity to bid on the destination marketing contract.

Councilman Mark DiNunzio recommended a full audit from an outside CPA firm, citing that other city contracts such as with the library require this. It was ultimately decided that staff would come back prior to the end of the month with recommendations as to procedure and duration of time for when such a line item audit should or will be conducted, if at all.

Councilman Mike Ward, although sympathetic with the Chamber’s efforts, expressed at length the need to ascertain “maintaining capacity,” meaning exactly how many day-trippers versus destination visitors does Sedona have and what will be the results of target marketing.

Ward emphasized $1,230,000 as being a large percentage of the overall budget and further expressed concerns about additional small grants that have been claimed by the Chamber for events such as the Marathon.

Sedona City Council

Expressing further apprehension, Ward cited City money spent for the visitor’s center should be represented as the “Sedona Visitor Center” and not the Chamber of Commerce as the present sign indicates. He further questioned if businesses who aren’t members of the Chamber of Commerce are receiving equitable referrals.

Ward is troubled that additionally (and ongoing) $78,000 goes to Main Street; $100,000 annually to “manage” uptown parking; $45,000 for private property parking leases; $50,000 to an employee “to keep uptown clean;” $250,000 is being held aside for parking meters; $125,000 has been designated to clarify how to get from the City owned parking lot to Main Street; $866,000 for one time highway maintenance on that portion of SR 89A the City took back from ADOT because of insistence by uptown businesses; and, last but not least, $800,000 is being considered for better access from the City parking lot via the Wayside Chapel to include requirements for making such improvements ADA compliant. His concern is the additional amount of money in excess of two million dollars being spent uptown versus amenities for businesses in West Sedona which is a vital part of Sedona’s commercial ability to generate sales taxes.

The City Council was in agreement for the need to bring the final documents relating to “Product Development” for contract approval prior to November when a new Mayor and three new City Council Members will be seated.

The Destination Marketing Contract with the Chamber of Commerce, if approved, will be awarded for fiscal 2014-15 and renewable for the following two years with terms for cancellation included in the agreement.

At the council meeting on May 27, Mark Reader, Managing Director of Stifel Nicolaus & Co., Inc. discussed the final terms secured for the refinancing of City’s existing 2004 Excise Tax Revenue Refunding Obligations. Requests for Proposals to twelve financial institutions produced six bids. The winning bid was at 0.66% from Wells Fargo. This was substantially lower than the 1.66% Mr. Reader suggested back in March. It will reduce the debt service by approximately $550,000. This transaction is complete. Future considerations will be forthcoming at appropriate times.

Sedona wastewater treatment pond

An Ordinance adopting new monthly wastewater rates and wastewater capacity fees to become effective July 1st was approved 6/1 by City Council. (Councilman John Martinez was the opposing vote.) Also approved was a reduction in the percentage of sales tax from 35% to 30% to subsidize the wastewater treatment plant. (A decision contrary to commitments made at the time of Sedona incorporation.)

At this same meeting (5/27), a motion was made to approve the Tentative City Budget for fiscal year 2014-15 thereby setting a cap at $38,385,154. It passed 6/1, with Councilman John Martinez voting “no.”

A bit about this budget: At the top of the list of Summary of General Fund Changes is “Increased contribution to Chamber of Commerce: $623,500.” Community Focus Areas (Cultural Park & Soldier Pass) have been earmarked for $56,500. Included under the “General Amount of $14,829,308:” Special Revenue Grants, $1,815,140; Capital Funds, $7,753,861; Wastewater Enterprise, $13,747,132.

Always of particular interest during budget planning sessions are Capital Improvement Projects (CIP). Fiscal year 2014-15 at $12.3 million represents an increase from the current $10 million amount.

Following is a breakdown of requests from City Departments:

PARKS & RECREATION: Barbara Antonsen Memorial Park: $900,000; Park land acquisition for creek front property: $1,650,000; Park/trail easement acquisition: $50,000; Shade structures and playgrounds: $35,000; Bike skills park; $141,000.
(Total: $2,776,000)

ART IN PUBLIC PLACES: Art in the roundabout: $75,000

COMMUNITY DEVELOPMENT: Brewer Road property design for future development: $150,000
Note: City staff will recommend source of this funding to come from the Community Facilities District (in-lieu of bed tax fees) generated by the Fairfield and Summit timeshare complexes, earmarked use to be directly beneficial to residents.

Sedona Police Department is located on Roadrunner Drive in west Sedona

POLICE DEPARTMENT (although Police Chief Ray Cota has gone public with a request for either a new station or major renovations to the old one): Shooting range improvements: $388,750; Police facility renovations: $151,000; Radio communication enhancement to correct current “dead spots” throughout the city; $430,000 (Total: $969,750)

PUBLIC WORKS: Total for specific projects: $2,027,220

DRAINAGE: Total for specific projects: $2,051,891

WASTEWATER: Effluent Management: $2,202,389; Future Effluent Management: $2,084,034. (Total: $4,286,423)

Wish List Total: $12,336,284

Unfortunately, according to Ms. Karen Daines (Assistant City Manager), “Projects without dedicated revenue streams, including most sidewalk, drainage, and public safety projects, must all compete for a finite amount of General Fund resources” and Development Impact Fees and money from this Community Facilities District must specifically benefit residents. Is there really justification to use it for purchasing vacant land for parks and, most recently, staff recommendation to use Fairfield/Summit “in-lieu of bed tax” CFD funds for future development of the Brewer Road property? Does this interpretation mean that sidewalks, drainage, and public safety projects don’t benefit residents and, yes, even tourists?

A flurry of decisions will be made between now and July 1, 2014, many of which will impact not only Sedona in general but this year’s newly elected as well as those seated in the future.

The clock is ticking.

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