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A .15% sales tax proposal emerges at City Hall from the Protect and Preserve Scottsdale Task Force

Photo of Scottsdale
The Feb. 26 public hearing was ultimately the culmination of the work done by a group of Scottsdale volunteers tapped by Scottsdale City Council to explore municipal steps following the expiration of one of the two established, voter-approved sales tax measures focused on the McDowell Sonoran Preserve. (Graphic illustration: Terrance Thornton/DigitalFreePress)
Funding measure meant to meet unfunded needs at Scottsdale City Hall
By Terrance Thornton | Digital Free Press

In little over a year, a sales tax will sunset within municipal bounds of Scottsdale, but city leaders appear to be putting the pieces of the ballot language puzzle together to ask voters this November to replace the expiring sales tax with a .15% sales tax to be installed for the next 30 years.

City leaders estimate if voters approve the new, reduced sales tax rate city coffers could see an influx of $25 million on an annual basis for the next 30 years, which they say will go to pay for unfunded needs citywide meanwhile paying for WestWorld infrastructure improvements.

In 1995 and in 2004, Scottsdale voters approved a 0.20% tax — the 0.20% preserve tax today in question — to fund land acquisition only and a 0.15% tax to fund land acquisition and improvements in the McDowell Sonoran Preserve.

Of note: the 2004 .15% sales tax — not the one in question today — established in 2004 for land acquisition and improvements expires in 2034.

Revenues from the 0.20% preserve tax and the 0.15% land and improvement tax were used to acquire over 30,000 acres of land now knows as the McDowell Sonoran Preserve that entailed constructing 12 trailheads and 235 miles of trails in the preserve.

Today, the McDowell Sonoran Preserve is a beloved amenity known the world over as the single largest municipal land preserve in the United States, officials at City Hall say.

“Our task force No. 1 recommendation is to request voter approval to extend the .20 expiring tax rate at a reduced rate .15 percent for 30 years effective July 1, 2025,” said Cynthia Wenstrom, chairwoman of the Protect and Preserve Scottsdale Task Force, during a Feb. 26 work session discussion at City Hall, 3939 N. Drinkwater Blvd.

“Our recommendations, I would ask that you remember that 92% of surveyed voters overwhelming agree our parks, including the McDowell Sonoran Preserve, improve our quality of life. More importantly, from the start, now we know that 94% of surveyed voters agree it is a good idea to find parks, recreation, the McDowell Sonoran Preserve and all without increasing the tax rate.”

Earlier this year the task force surveyed 1,700 Scottsdale residents, which you can read about HERE.

The Feb. 26 public hearing was the culmination of the work done by a group of Scottsdale volunteers tapped by Scottsdale City Council last year to explore municipal steps following the expiration of one of the two established, voter-approved sales tax measures focused on the McDowell Sonoran Preserve acquisition, and later maintenance.

Scottsdale City Council, by a margin of 5 to 2, last September approved the municipal measure establishing the resident-only committee dedicated to developing a plan for what happens after the .20% sales tax were to expire. Resolution No. 12532 creates the “Protect and Preserve Scottsdale Task Force.”

Linda Milhaven, former member of Scottsdale City Council now in pursuit of the mayor’s seat, and current Councilwoman Tammy Caputi, who is seeking re-election this November, were the dissenting votes for the formation of the commission.

Members of the Protect and Preserve Scottsdale Task Force are:

  • Cynthia Wenstrom, chairwoman;
  • Raoul Zubia,vice chairman;
  • Carla;
  • Nicholas Hartmann;
  • Jace McKeighan;
  • Daniel Schweiker;
  • Mark Winkel; and
  • John Zikias;

“Right now the current tax is $4.95 per month per household —- that’s what the average household pays,” said Raoul Zubia, vice chairman of the Protect and Preserve Scottsdale Task Force. “When we reduce it to .15% that will be reduced to $3.71. Visitors play a huge part in our sales tax revenue between Spring Training now, the Phoenix open recently, and last year’s Super Bowl, a lot of these tax revenues come in from out of state.”

During the three-hour work session discussion, Scottsdale department leaders came to City Hall to plead the case of unfunded needs throughout the municipality. These were the department leaders who came to spoke to City Council regarding unfunded needs at the city of Scottsdale:

  • Assistant Chief of Police Richard Slavin represented the police department.
  • Nick Molinari represented the parks and recreation department.
  • Bill Murphy represented WestWorld of Scottsdale
  • Kroy Ekblaw represented the McDowell Sonoran Preserve
  • Fire Chief Tom Shannon represented the fire department
  • Sonia Andrews represented the city treasurers office
  • Ben Lane represented the city clerk’s office

Read for yourself the unfunded needs explained by city leaders in late February 2024 HERE.

A view of Scottsdale Civic Center. (Photo: Arianna Grainey/DigitalFreePress)
The proposed Protect and Preserve Scottsdale sales tax measure

The Protect and Preserve Scottsdale Task Force is proposing a 30-year sales tax rate at .15% to be used to pay for unfunded needs throughout the municipality coupled with a debt-service payment plan for WestWorld infrastructure improvements.

Department leaders at City Hall identified a total of $292 million in unfunded needs providing examples for a vital needs for more security and patrol at city parks and a major Indian Bend Wash draining capital improvement campaign.

City leaders have devised an annual budget of $10.3 million if the new sales tax measure were to be approved by voters later this year.

Here is the breakdown of percentage points and dollar amounts:

  • Indian Bend Wash capital improvements: $248 million or 51%
  • Parks and Recreation needs: $2.8 million or 14%
  • McDowell Sonoran Preserve needs: $3.5 million or 18%
  • Park Rangers: $1.7 million or 7%
  • Brush fire mitigation: $2.3 million or 10%

Allocations meant to pay for the debt issued to pay for contemplated improvements at WestWorld of Scottsdale — things like shade, drainage and ingress and egress improvements — will not exceed 25% of collected sale tax remits if voters approve the new .15% sales tax measure, if and when it appears on a ballot.

Sonia Andrews, Scottsdale city treasurer, explains the WestWorld funding contemplated in the plan will materialize as an issuance of municipal bonds to pay for capital needs meanwhile the sales tax collected would pay for the debt service accumulated for improvements at the equestrian center.

The 25% number is the total amount — $6.2 million — that can be applied to debt service on an annual basis if and when Scottsdale voters approve the new sales tax measure at the 2024 general election, Ms. Andrews explained to City Council.

“The citizens of Scottsdale enjoy a very, very low tax rate, at 8.05 percent,” Ms. Andrews pointed out during the public hearing. “We should be very proud of how we run our city with all of the world class services at a very, very low rate — with this recommendation, we would lower it , the rate, even more.”

Furthermore, Ms. Andrews points out debt that could be issued for WestWorld of Scottsdale improvements are ‘minuscule’ compared to a holistic view of the operating budget at the city of Scottsdale.

“This is a very small portion of the overall operating budget as the city’s operating budget is $800 million,” she said. “The city’s operating budget is $800 million and the asks here are minuscule. All allocations will be defined by ordinance.”

Initial thoughts from Scottsdale City Council

Scottsdale Mayor David Ortega says he is looking for consensus of what next steps ought to be when one of the two established sales tax measures connected to the McDowell Sonoran Preserve expire.

“We have received the information examined by the group and we have now received that,” he said. “When a proposal goes to the voters … it will be written in ordinance — no other City Council can mess with it, but of course the ordinance has be line with the vote of the people. It has to be done in the way that meets the desire of the people.”

Although formal votes are not taken during a work session discussion, common consensus oftentimes emerges as direction to staff, Mayor Ortega points out.

“We are looking for a response from our council, we are not taking a vote here, but this is about real-time funding with real-time results,” he said. “All of these things have been quantified in what I think is a very professional manner — and we need to have a dedicated funding source.”

Councilwoman Kathy Littlefield says she is ‘very impressed’ by the work of Scottsdale residents to cultivate such a concise funding proposal.

“As I read this book and looked at what you have done, I have to say I was very impressed,” she said of the 160-page document presented to City Council this past week. “I believe we are not moving into a new phase, it’s a different attitude and a different set of needs and I think you addressed that very well. I think we as a council need to look at this very seriously because it belongs to our citizens — this is not my land, it is not our land up here, it is the citizens’ land.”

For Councilwoman Betty Janik, allocation of funds need a bit more clarity.

“I would like to see more information on allocation of funds when the sales tax revenue is much higher than we expected,” she said. “I am bothered by a sliding scale. I am bothered about the less than 25% for funding at WestWorld — I would really like to functionally see how it would work.”

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