Taxpaying residents of Scottsdale may ponder the Polish literary great Bruno Schulz, who, in “The Night of the Great Season,” explored the existence of “peculiar years, degenerate years onto which, like a sixth little finger on a hand, grows a thirteenth false month.”
Those within the city borders may wonder if a “false month” or two was inserted in calendars since 2019.
Six Novembers ago, a Scottsdale City Council that included current councilwomen Solange Whitehead and Kathy Littlefield asked voter approval “authorizing the city to issue and sell up to” $319 million in bonds. The taxpayer money, they said, would fund a whopping 58 projects.
Four years later, one project soaring to nearly five times its original budget was blamed on a “clerical error.”
And, just a few weeks ago, the Bond Oversight Committee was told bond Project 41’s promised $70,000 per year savings may have been something of a sixth little finger.
“We’re not even sure where those bond numbers came from,” a city administrator sheepishly admitted to incredulous committee members.
No lack of confidence was shown by city staff – and elected officials — before, during and directly after the 2019 bond approval.
In February 2020, Council adopted an implementation plan to complete these projects over a 10-year period.
Nearly halfway into that plan, just under half of the 58 projects are complete. The 26 bond projects that have reached the finish line total $169 million – 32% over their collective budgets.
David Smith, a former councilman and city treasurer, said that is not necessarily troubling.
“In one respect, it’s the nature of the beast when you go to the voters with a laundry list on what you need to do – and you’re forecasting out 10 years in the future, and have to backdate by election time for a year or two,” he said.
Though he has since resigned as chairman of the Budget Review Commission, Smith and his colleagues came up with recommendations to tighten project estimates. One of them: “having all the parties at the table when the project is designed.”
Several of the 2019 voter-approved projects came in under budget, highlighted by: “Replace WestWorld Arena Lights to Reduce Operating Costs,” which was planned for $1.3 million but came in at half that; and “Renovate Arena at WestWorld to Provide Flexible Event Space,” which cost $758,835, 20% under its nearly $1 million original estimate.
But the biggest projects soared over budget by millions.
Bond project No. 1, and one of the first to be tackled and finished: “Replace Aging Infrastructure and Improve Public and Event Spaces on Civic Center Plaza.”
The Civic Center renovation went 25% over budget, from $27.3 million to $33.2 million.
A new fire station on Hayden Road just south of the Loop 101 came in at $12.5 million, around 20% higher than the voter-approved budget.
Voters were told bond project No. 27, “Modernize and Expand the Police and Fire Training Facility,” would cost $4.2 million. Its finished price tag was more than four times that: $18 million.
A joint project, “Build a new Fire Department Training Facility,” rose by 60%, from an original $18.2 million budget to just over $29 million.
Rather than $22.4 million, the related projects cost $47 million.
When the cost overruns were revealed in 2023, Councilman Barry Graham – then in his first year as an elected representative – railed against the increases.
At a council meeting, Graham grilled Fire Chief Tom Shannon, who replied a “clerical error” vastly underestimated the original cost of the facility’s construction costs.
“I support the project,” Graham reiterated. “But what I’m trying to hone in on is how we told voters in 2019 that the facility was going to be 7,000 square feet and this one is double that.
“And I’m trying to home in on why we told voters it was going to be $4.2 and now we’re voting on $20 million, which is almost a 400% increase.”
Though the final bill was slightly less, Graham remains baffled by the reasons behind the budget jump.
Even so, he stands by the letter of support he submitted before the 2019 vote.
“Cities can’t do these capital projects without voter approval. It went through the proper channels – outreach, community input,” Graham said.
Though he acknowledges the argument “we can’t live without these” might have been too strong, “I thought most of the projects were important,” Graham said.
“I don’t think it was too many projects,” he added. “It was 58 projects – we hadn’t gotten a bond since 2000. It’s kind of a once in a generation sort of request.”
Yet he remains troubled by some of the budget overruns.
Acknowledging the post-pandemic inflation was an unknown factor in 2019, Graham remains critical of the process.
“I think what went wrong was cost estimates,” Graham said. “And … the execution on the back end as far as monitoring.”
More to come
The remaining 32 projects have a collective budget of $150 million.
Graham pointed to two moves in January he said puts a better process in place to track these.
“The Council majority brought in City Manager (Greg) Caton to restore accountability and revived the Budget Review Commission to bring additional scrutiny and deliver results,” Graham said.
He pledged he is a “watchdog” and meets regularly with Caton and City Treasurer Sonia Andrews “to review progress and costs” of the bond projects.
What lessons should the city learn?
“Act faster—delays drive inflation,” Graham said.
And, he added, “estimate rigorously before asking voters for bonds.
“… Taxpayers pay the bill; they deserve the truth.”
Meanwhile, the Citizens’ Bond Oversight Committee learned some puzzling truths recently.
The volunteer committee’s last meeting of the year takes place at City Hall at 5 p.m., Tuesday, Nov. 18.
During an update at the Sept. 8 bond committee meeting, city engineer Alison Tymkiw noted the Aug. 1 grand opening for project 2, “Add Splash Pad and Improve Walkways at McCormick-Stillman Railroad Park.” The final price tag on that was over $1.2 million, a 37% increase from the original $917,000.
Regarding the long-awaited Thompson Peak dog park, Tymkiw said construction is planned to start later this year.” Last year, Council approved raising the budget on the dog park, from $4.6 million to $6 million.
As for Project 15, “Build 200 Space Parking Lot off 75th Street to Serve the City Court and Scottsdale Stadium,” Tymkiw said the $1.5 million project is “delayed but looking to reschedule for spring 2026.”
After referring to the “severely underfunded” Bond Project 60, which voters were told would “Double the Solar Power Generating Capacity at Appaloosa Library” for $40,000, the city engineer moved on to Project 58, “Install Parasol Solar Shade Structure at City Hall Parking Lot.”
“That construction is scheduled to start this fall,” Tymkiw told the committee – perhaps jumping the gun, as she did not give a presentation to Council on this until Oct. 21.
Council did approve a contract for project 58 by a 5-2 vote, despite vehement opposition from Mayor Lisa Borowsky and Councilman Adam Kwasman.
Puzzling numbers
Also at the September meeting, the committee was asked to approve a “scope change” on Project 41.
For the originally billed “Install Solar Heating System for Eldorado Pool,” the committee was pitched a curveball: “install a solar photovoltaic system in lieu of the proposed ground mounted solar water heating system.”
Tymkiw noted voters were told the solar water heating system would be an energy-cost savings – essentially, paying back $560,000 construction costs within a decade.
“It’s estimated to save $70,000 per year, but we don’t have any evidence that is the case,” Tymkiw said. “We’re not even sure where those bond numbers came from.”
She repeated that thought later:
“We weren’t able to figure out where that $70,000 estimate came from.”
And, the city engineer added, “The best time for the heating of the water would be in the summer – when we don’t need heating of the pool.”
Responding to a question, Tymkiw said the alternate solar-to-electric panel plan would save an estimated $7,000-10,000 per year in energy costs.
Brian Coughlan, one of the seven committee members, pondered the modest savings.
“That seems like an awful long payback period … about 55 years,” he concluded.
Joe DuBois, chair of the committee, was puzzled at what the committee was being asked to do with the proposed change.
“We would just ignore the $70,000 per year (savings)?” he asked.
“Correct,” Tymkiw said.
After a few committee members suggested it would be better to just get rid of the plan altogether, rather than making such a drastic change, a motion was made to eliminate Project 41.
But, at the suggestion of DuBois, the committee decided to defer the item and wait for more information.
Asked about Tymkiw’s presentation by the Progress, Graham called it “frustrating.”
Graham, who last week announced he is running for reelection next year, did not respond when asked if Caton and Andrews informed him of the mystery behind Project 41 during his “regular meetings” with them regarding bond projects.
Whitehead, who also is running for reelection, was asked about Tymkiw’s statements regarding the El Dorado Pool project.
“From what I’ve seen in the residential market, solar for heating pools does not have the financial or benefit upsides that are achieved using PV solar panels to generate electricity,” Whitehead said.
Whitehead did not respond to other questions the Progress posed about the bond projects she promoted in 2019.
Former Councilman Smith, for one, is troubled by two projects from that bond list.
Regarding the police and fire training center “clerical error,” Smith said:
“That inflated because somebody figured it out wrong, intentionally or not. That was an avoidable mistake.”
As for not knowing where savings promised to voters came from on the El Dorado Pool project, “That’s a degree of ineptitude that somebody has to be accountable for,” Smith said.
“It should not be the voters.”
A presentation on the Project 41 “scope change” is scheduled for the Bond Oversight Committee meeting at 5 p.m. Thursday, Nov. 18.
The committee can only make recommendations, with Council having the ultimate authority to make changes or eliminate voter-approved projects.
“I’ll likely support the recommendation we receive from staff,” Whitehead said.
Just the tax …
The fine print on the 2019 ballot: “These bonds will be issued as general obligation bonds and the issuance of these bonds will result in a property tax increase sufficient to pay annual debt service on the bonds.”
But, thanks to fast-increasing Scottsdale home values, city property tax rates have actually gone down since the 2019 bond approval.
According to City Treasurer Sonia Andrews, “we still have about $79M in authority we have not issued yet.
“With the (bond) debt that has been issued, and the increase in limited property values, our secondary property tax rates have decreased from $0.5214 in fiscal year 2019-20 to $0.4233 in fiscal year 2025-26.
“Using the median limited property value for Scottsdale single-family dwellings reported by the County Assessor, the secondary property taxes increased by $7 from fiscal year 2020 to fiscal year 2026.”