Carefree Truth
Issue #563, April 28, 2017
The second budget workshop began with an extensive period of questions from some of the Council members concerning the line item budget presented, which they received the Thursday prior to Tuesday's meeting. Councilman Jim Van Allen requested that it be gone over page by page, starting with the first page. After nearly 40 minutes, it was agreed that Mr. Van Allen would meet with Town accountant Jim Keen at a later date for explanations of items about which he remained "puzzled".
https://vimeo.com/215015687
At the end of the Q&A period, Mayor Les Peterson presented the following budget overview which included the historic activity/revenue situation in Carefree, overall observations relative to historical activities, what the role of marketing should be in achieving "economic development", and the recommended Carefree marketing strategy and program events compiled by the Staff and the marketing committee. The following was noted on the Mayor's first slide: *This presentation represents recommendations from Town Staff, Mayor Les Peterson and Carefree Council Members Kroyer and Krahe with regards to the recommended Carefree Marketing Strategy and Program elements. We understand that a separate recommendation has been prepared and will be presented today by other Carefree Council members. The Town Council will select one of these two strategic directions for incorporation into the 2017-18 Carefree Budget.
Mayor Peterson began his presentation with the historic activity and gross revenues, from which an estimated $50,000 to $70,000 or more must be subtracted each year, showing data from 2008-2015, the latest figures available. From 2008, the beginning of the recession, to 2010, the fairs and festivals (F/F) revenue ranged from $21,000 to $47,000, with the number of fairs unavailable. In 2011 and 2012, with 10 fairs and 8 fairs, it increased to $82,000 and 87,000 respectively. Marketing was done internally. In 2013, the Owens Harkey advertising agency was hired. The F/F revenue increased to $118,000 with 8 fairs, and $126,000 in 2014, with 9 fairs. At the end of 2014, Director of Marketing, Gina Kaegi, was hired and Owens Harkey was fazed out when their contract expired in May, 2015. There were 9 fairs in 2014, generating $126,000. In 2015, Ray Villafane began working in Carefree. 10 F/F generated $126,000 in 2015.
Sales tax revenues in $ thousands are as follows:
2008 2009 2010 2011 2012 2013 2014 2015
Total 3,910 3,058 2,675 2,686 2,886 2,779 2,854 3,300
Retail 773 915 941 934 956 964 1,056 1,126
Rest/bars 225 217 225 226 240 230 105 133
Accom/Rentals 910 721 508 467 524 510 497 756
Const Sls Tax 1,177 635 414 505 542 458 586 633
Overall sales tax followed a pattern primarily related to the economic recession, accentuated by a combination of situations which included construction sales tax, performance of the "Big Four" retailers (Bashas', Lowes, Ace, and CVS), and changed ownership status and initiatives of the major resort in Carefree. Restaurant/bar sales tax decreased dramatically with the loss of Carefree Station. There was little discernable or direct correlation to the F/F activities.
Construction sales tax will likely continue to decline in the future, but over time additional rooftops in the overall area should increase sales of the Big Four retailers. The Carefree Resort is in escrow, with the new owners preparing to re-brand and revitalize it as a health and wellness center. Other sales tax categories will need to make up the losses in construction sales taxes. Restaurants/Bars, Accomodations/Rentals and Retailers selling appealing goods which are consumed on a frequent basis by the growing resident population and tourists/visitors seem to offer the greatest promise. It is unlikely that building existing Carefree businesses alone will generate the required increases in sales tax revenues. Building existing businesses and attracting new businesses within Carefree is what is referred to as "economic development".
Marketing and very selective changes in Carefree's Planning and Zoning Code will play major roles in achieving the desired economic development. Restructured fairs and festivals, which have demonstrated an ability to attract people to Carefree, should and will continue to be included in the marketing program, but are only a "spoke" in the entire marketing wheel.
Traditional marketing objectives include helping to create/change the image of Carefree, adding vibrancy and excitement, and creating a reason to come to the town, as well as helping to create and deepen the sense of pride among Carefree residents. Marketing must generate visits to the downtown area so that existing businesses may support and tie-in with the activities to build their business and generate additional profits.
The Town needs to also rely upon marketing initiatives to support and help achieve other tasks (e.g., economic development). These additional objectives required of marketing activities include helping demonstrate to prospective property and/or business owners that people will eagerly come to Carefree for a benefit they desire, creating a meaningful communications umbrella under which the Town Staff and Council members can present the compelling "Carefree Story" to those prospective investors in the town, and raising awareness of the town in the minds of prospective residents and business owners.
The Town's primary future revenue generation focus should be on economic development activities, with marketing taking the leading role in achieving successful results. It is through achieving economic development successes that the Town will gain ultimate financial security. A few carefully focused festivals should be a component of the overall marketing program. In Carefree's situation, marketing should not be required to pay back dollar for dollar in the short term, but it should be evaluated for its contributions towards making the economic development effort more effective and successful.
In the past, compensating for the executional deficiencies of some of the F/F promoters has so consumed the Town Staff's and several Council members' limited available time that insufficient time remained for economic development activities. Every effort should be made to make the Town's marketing initiatives as efficient and cost effective as possible. Cutting these marketing expenditures dramatically and/or prematurely, or fielding only a portion of the marketing program required before the new businesses are in place, would all but eliminate the possibility of attracting them to Carefree and diminish all of the investments to date.
https://vimeo.com/215124011
Lyn Hitchon
Prepared by Carefree Truth
Visit our website at www.carefreetruth2.com If you know anyone who would like to be added to the Carefree Truth email list, please have them contact me. Feel free to share Carefree Truth with others on your list.
Visit www.carefreeazbusinesses.com to see more info about businesses in Carefree. Please support our merchants.
Issue #563, April 28, 2017
The second budget workshop began with an extensive period of questions from some of the Council members concerning the line item budget presented, which they received the Thursday prior to Tuesday's meeting. Councilman Jim Van Allen requested that it be gone over page by page, starting with the first page. After nearly 40 minutes, it was agreed that Mr. Van Allen would meet with Town accountant Jim Keen at a later date for explanations of items about which he remained "puzzled".
https://vimeo.com/215015687
At the end of the Q&A period, Mayor Les Peterson presented the following budget overview which included the historic activity/revenue situation in Carefree, overall observations relative to historical activities, what the role of marketing should be in achieving "economic development", and the recommended Carefree marketing strategy and program events compiled by the Staff and the marketing committee. The following was noted on the Mayor's first slide: *This presentation represents recommendations from Town Staff, Mayor Les Peterson and Carefree Council Members Kroyer and Krahe with regards to the recommended Carefree Marketing Strategy and Program elements. We understand that a separate recommendation has been prepared and will be presented today by other Carefree Council members. The Town Council will select one of these two strategic directions for incorporation into the 2017-18 Carefree Budget.
Mayor Peterson began his presentation with the historic activity and gross revenues, from which an estimated $50,000 to $70,000 or more must be subtracted each year, showing data from 2008-2015, the latest figures available. From 2008, the beginning of the recession, to 2010, the fairs and festivals (F/F) revenue ranged from $21,000 to $47,000, with the number of fairs unavailable. In 2011 and 2012, with 10 fairs and 8 fairs, it increased to $82,000 and 87,000 respectively. Marketing was done internally. In 2013, the Owens Harkey advertising agency was hired. The F/F revenue increased to $118,000 with 8 fairs, and $126,000 in 2014, with 9 fairs. At the end of 2014, Director of Marketing, Gina Kaegi, was hired and Owens Harkey was fazed out when their contract expired in May, 2015. There were 9 fairs in 2014, generating $126,000. In 2015, Ray Villafane began working in Carefree. 10 F/F generated $126,000 in 2015.
Sales tax revenues in $ thousands are as follows:
2008 2009 2010 2011 2012 2013 2014 2015
Total 3,910 3,058 2,675 2,686 2,886 2,779 2,854 3,300
Retail 773 915 941 934 956 964 1,056 1,126
Rest/bars 225 217 225 226 240 230 105 133
Accom/Rentals 910 721 508 467 524 510 497 756
Const Sls Tax 1,177 635 414 505 542 458 586 633
Overall sales tax followed a pattern primarily related to the economic recession, accentuated by a combination of situations which included construction sales tax, performance of the "Big Four" retailers (Bashas', Lowes, Ace, and CVS), and changed ownership status and initiatives of the major resort in Carefree. Restaurant/bar sales tax decreased dramatically with the loss of Carefree Station. There was little discernable or direct correlation to the F/F activities.
Construction sales tax will likely continue to decline in the future, but over time additional rooftops in the overall area should increase sales of the Big Four retailers. The Carefree Resort is in escrow, with the new owners preparing to re-brand and revitalize it as a health and wellness center. Other sales tax categories will need to make up the losses in construction sales taxes. Restaurants/Bars, Accomodations/Rentals and Retailers selling appealing goods which are consumed on a frequent basis by the growing resident population and tourists/visitors seem to offer the greatest promise. It is unlikely that building existing Carefree businesses alone will generate the required increases in sales tax revenues. Building existing businesses and attracting new businesses within Carefree is what is referred to as "economic development".
Marketing and very selective changes in Carefree's Planning and Zoning Code will play major roles in achieving the desired economic development. Restructured fairs and festivals, which have demonstrated an ability to attract people to Carefree, should and will continue to be included in the marketing program, but are only a "spoke" in the entire marketing wheel.
Traditional marketing objectives include helping to create/change the image of Carefree, adding vibrancy and excitement, and creating a reason to come to the town, as well as helping to create and deepen the sense of pride among Carefree residents. Marketing must generate visits to the downtown area so that existing businesses may support and tie-in with the activities to build their business and generate additional profits.
The Town needs to also rely upon marketing initiatives to support and help achieve other tasks (e.g., economic development). These additional objectives required of marketing activities include helping demonstrate to prospective property and/or business owners that people will eagerly come to Carefree for a benefit they desire, creating a meaningful communications umbrella under which the Town Staff and Council members can present the compelling "Carefree Story" to those prospective investors in the town, and raising awareness of the town in the minds of prospective residents and business owners.
The Town's primary future revenue generation focus should be on economic development activities, with marketing taking the leading role in achieving successful results. It is through achieving economic development successes that the Town will gain ultimate financial security. A few carefully focused festivals should be a component of the overall marketing program. In Carefree's situation, marketing should not be required to pay back dollar for dollar in the short term, but it should be evaluated for its contributions towards making the economic development effort more effective and successful.
In the past, compensating for the executional deficiencies of some of the F/F promoters has so consumed the Town Staff's and several Council members' limited available time that insufficient time remained for economic development activities. Every effort should be made to make the Town's marketing initiatives as efficient and cost effective as possible. Cutting these marketing expenditures dramatically and/or prematurely, or fielding only a portion of the marketing program required before the new businesses are in place, would all but eliminate the possibility of attracting them to Carefree and diminish all of the investments to date.
https://vimeo.com/215124011
Lyn Hitchon
Prepared by Carefree Truth
Visit our website at www.carefreetruth2.com If you know anyone who would like to be added to the Carefree Truth email list, please have them contact me. Feel free to share Carefree Truth with others on your list.
Visit www.carefreeazbusinesses.com to see more info about businesses in Carefree. Please support our merchants.