Financial Firestorm?

The city says it needs almost $4 billion; here's a breakdown of that wish list

Can you spare $3.9 billion?

It's the figure that city officials say Tucson is short on for the bill for capital needs--roads, parks, neighborhood services, police and fire stations, and even a new City Hall. Broken down further, the bill covers roughly $1.5 billion worth of work that could "reasonably" be done during the next five years and almost $2.4 billion beyond that window.

The $3.9 billion bill is the centerpiece of a report released in February by the Citizen Finance and Service Review Committee, a group appointed by City Manager James Keene last May to examine the city's books. The 10-member committee included Rick Myers, president of the Southern Arizona Leadership Council and the former head of the local IBM plant; UA economist Marshall Vest; powerhouse attorney Si Schorr; and Tillie Arvizu of Chicanos por la Causa.

The conclusion: The city must act immediately to diversify its revenue stream and spending patterns.

"The threats to our community are every bit as real as the firestorm that swept through Summerhaven in 2003," says the report. "If we do not act now, the recovery effort may be insurmountable. We could find ourselves in the same position as Buffalo, New York, declaring bankruptcy for the county and city."

Myers says the committee used dramatic language in the hope of getting the attention of local leaders.

"We don't want to be alarmist, because the community is not falling apart," says Myers. "This is a good place to live; there are a lot of good companies here."

But, he adds, the city continues to have budget trouble and has failed to invest in basic infrastructure, like roads and parks.

"At some point, those bills are going to catch up with us," Myers says.

But how solid is that $3.9 billion figure? It appears in Tucson's five-year capital improvement budget under an inventory of the city's unmet capital needs, as projected by different city departments. Essentially, it's the combined wish list of city staff, assembled for the first time in one place.

About three-fourths of the money--$3 billion--covers transportation spending. Of that, $2 billion would totally overhaul the transportation system, widening major roads and bringing all streets to brand-new condition. Another billion bucks would add sidewalks and street lights, as well as expand the transit system.

An additional $726.9 million is in the category of neighborhood services:

· New recreation centers, ball fields and open space, along with restoration of various historical buildings, would cost $457.2 million.

· A new courthouse built in conjunction with the county would cost $45 million.

· New southside and downtown fire stations, along with a new firefighter training academy, would cost $30 million.

· Eight new libraries would cost $81 million.

· Two new police substations and a new forensics lab would cost $45 million.

Then there are other miscellaneous expenses:

· A new City Hall, along with refurbished council ward offices, a training facility for public works, and acquisition of land near Davis-Monthan Air Force base would cost $117.6 million.

· Projects to repair the Tucson Convention Center would run $11.4 million.

Are all of these things needed for the community? That depends on whom you talk to, although few residents are vocally demanding better council offices.

But as Myers points out, even if the bill is only half of what has been projected, the city still faces $2 billion in unmet needs--with more trouble on the way as the population continues to grow.

As city budget guru Ned Zolman says, "We are so far behind that it's almost ludicrous to think you can talk about comparisons with other cities that kept up."

To deal with financial crunch, the committee is calling for a major overhaul in the city's financial system, much as Gov. Janet Napolitano's committee called for revamping the state tax code--a proposal that has little political momentum at the Capitol.

Given the fact that Keene handpicked the committee and that they received all their information from city staff, it comes as little surprise to some that their recommendations dovetail with Keene's unsuccessful efforts to enact a garbage collection fee, advertising and rental taxes, and higher park and rec fees. Most of those proposals look like they're headed for rejection again this year. (See "Budget Crunch.")

But the committee also made a number of long-term proposals that have failed in the past.

For example, it calls for a half-cent sales tax to fund transportation projects, administered through a regional transportation authority. Work on that idea is already underway, with Napolitano signing a bill last week that gives the Pima Association of Governments the power to put a half-cent proposal on the ballot. Even though voters have rejected the idea of funding transportation projects through a sales tax twice in the last two years, and four times since 1986, local officials hope that a regional approach will persuade them to support the next plan.

The other long-term solutions call for greater efficiency, higher property taxes and greater regional cooperation. For starters, the committee suggests the city ask voters to amend the city charter to lift the current ceiling on bond debt so the city could sell more bonds that would be repaid through property taxes--which could prove a tough sell in a county where high property taxes are a frequent complaint of the business community.

The committee's other great hope is that county residents who live north of the Rillito River will finally embrace efforts to annex them into the city limits.

Having more people within the city limits would bring more state dollars into the region because the current funding formula favors municipal residents. The budget committee estimates that the net gain for the community could be somewhere in the neighborhood of $60 million a year.

But critics of the strategy, such as council members José Ibarra and Steve Leal, say that the city has yet to do a rigorous analysis to show whether the cost of providing the new citizens with services--garbage collection, police and fire protection, road maintenance--would outweigh the new revenue. If there's no net gain for the city, then the inner core would essentially be subsidizing the wealthier suburbs.

Under current conditions, however, the question is somewhat academic. Annexation is a slow process under state law; besides, county residents have shown no new eagerness to join the city. If the city council approves garbage fees and higher property tax rates, the city would probably be lose what few incentives it has to lure them in.

In a series of public meetings--which Myers candidly admits he wishes the committee had held before they released their final report--most of the tax and fee proposals have received a chilly reception.

But Myers says the community needs to invest in roads, parks, downtown and other areas if it hopes to provide residents with a decent quality of life and remain competitive in efforts to attract high-paying jobs.

"When people want to move into a community, they look at a lot of things," Myers says. "They look at the educational system for themselves and for their children. You want to be active. You want to know there's a good system of arts in the community. You want to know there are soccer teams and Little League teams and Pop Warner football and if there are fields for kids to play on. You want to have regional parks where you can take your dog for a walk or hike in the mountains."

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