On November 2, 2010, citizens approved a new provision to our City Charter, Article1§3(O), providing:
“The city shall not give…public funds…to any individual, association or corporation…except where there is a clearly identified public purpose and the city…receives direct consideration substantially equal to its expenditure.”
It’s legalese, but, in a nutshell, it’s to make sure taxpayers don’t get ripped off by folks who acquire taxpayer funds or assets in some lopsided deal. It’s more than just a reminder to City Council and staff they have a responsibility to negotiate the best possible deal for citizens. Even in the short time this provision has existed, it’s been applicable to several Council decisions.
Rental of Public Property: Most recently, Article1§3(O) was cited in support of a resolution to rent a public sidewalk in front of one of the downtown bars. The Council resolution affirmed “…there is a clearly identified public purpose” of having bars place tables and chairs on the sidewalk. At some time in history, the city spent taxpayer dollars to build a sidewalk of a certain width, so the Council resolution went on to affirm “…that city will receive direct consideration substantially equal to its expenditure.” Just for the record, the “direct consideration” was a daily rental of a little over 1.6 cents per square foot.
There is no indication how Council determined the sidewalk was now suddenly wider than needed, nor was there any indication Council relied on a fair market appraisal to determine the rental value.
Outright Sale: On March 18, the city privately sold a 1,216 farm for $9,126,450 or $7,500 per acre. Normally, selling public property without an auction is only allowed if the sale is to an adjoining landowner and the property is a small parcel, such as an abandoned utility easement. In this case, the buyer, according to the Arizona Republic, was Conley Wolfswinkel, a west valley real estate developer on the rebound from a felony conviction for his role in the S&L debacle of the late 1980s. The City Manager determined “…the public benefit will be served by uniting ownership in the City’s farm with the parcel owned by [Wolfswinkel].”
It is obvious how this deal benefits Wolfswinkel, but how will the public benefit be served? Would an auction have brought more money?
Abandonment: State law provides a city may dispose of a public roadway no longer necessary for public use. Based on this, Council agreed (June 28, 2011) to abandon a half-block length of Angus Drive to a property owner whose two land parcels were otherwise divided by the 50-foot-wide roadway. The combined property will now have 320 feet of uninterrupted Scottsdale Road frontage which, coupled with permission to build up to 90 feet high and up to 50 dwelling units per acre, is a pretty valuable upgrade!
It’s not clear where Council found the “clearly identified public purpose” to this abandonment. It’s harder still to imagine how Council estimated the city would receive “direct consideration substantially equal to its expenditure.” In return for the street abandonment, the City was promised 1% of the future building valuation would be used for a Cultural Improvement Program. There were caveats: “…the Program will be submitted at a future submittal date when the owner has further refined the development plan” and the owner “has no immediate plans to develop the site…”
When City Charter Article1§3(O) is invoked, it’s not so much a test of factual legality as it is judgment… did the City Council, acting on behalf of citizens, strike the best possible deal in each of these cases? Each case is a reminder to citizens of the importance of electing leaders with experience and expertise to represent them. I have that experience and, if elected, I will ably represent the interest of citizens. I would appreciate receiving one of your three Council votes on November 4.