Carefree Truth
Issue #755, June 7, 2019
Mayor Les Peterson thanked everyone for coming, and called the budget meeting to order. Gary Neiss presented much the same budget information that was presented last month at the adoption of the budget bottom line, so I will not repeat it. The presentation including that information is in the first part of the video at the bottom.
Other than some comments he made during his presentation, I will concentrate on the discussion between the Council members.
Mr. Neiss described how the Town is getting out of the "entertainment business". 2/3 of the marketing budget was earmarked for the Pumpkin Festival. The Town will be turning the event over to Villafane Studios over a gradual 3 year period. There is a "call back agreement" with that, stating if there is a deficit this year or next year, Villafane Studios will reimburse the Town the 3rd year. A mechanism is in place that ensures whatever Carefree spends will be recaptured at the tail end. It is a very good agreement that gets Carefree out of the Pumpkin Festival event business but continues to celebrate our signature event.
The major change in Mr. Neiss' presentation is that, as of the end of the April financial reconciliation, the reserve account has increased to almost $10 million, the highest level ever. This is the result of restraint, good planning, and good management. Now, the Town will be reinvesting some of that money into Carefree's infrastructure. Carefree's residents will see some very positive impacts over the next several years as a result of this.
Councilman Gene Orrico wanted to explain why he was the only person who voted against the budget bottom line at the May meeting. He was opposed to the marketing budget. He praised Marketing Director Beth Renfro, saying she was the finest marketing director Carefree has ever had.
He noted that the Town had already signed the contract with Villafane Studios, so it was "set in stone". But the Town is waiting until 2020 to get out of the Pumpkin Festival. "Actually, what we should have did was we should have let Mr. Ray handle it right now, instead of us funding everything and hoping we get back that negative amount. There will be a negative amount at 2020. And if we don't get it back, what recourse do we have?"
Mr. Orrico stated that if you want 100% of the gain, you should take 100% of the risk. That's what he did as a business person. "Right now, basically we're covering all the risk and whatever we get back if there is a deficit, he ends up taking, and should be reimbursed to us." If there is a deficit the 2nd year, then he should reimburse Carefree on the 3rd year for the 1st and 2nd years.
He believed that Carefree was remiss in not saying, "Hey, take it over right now, get 100% of the profits, if we truly believe there is going to be a profit. I hope, for the sake of the residents of Carefree that there is a profit, because we have been hemorrhaging money on the Pumpkin Fest and it has not helped very many of the merchants". He said he talked to many of the merchants. People come to the "carnival-like Pumpkin Festival", but are not going to the merchants other than maybe a couple of restaurants. Black Mountain Coffee Shop does well, and possibly Venues. The purpose is to help the merchants.
It's a wonderful event "but it isn't taking and generating any kind of cash for us". He talked about the money spent over the past 3 years on staff time, equipment, and merchandise. He said he was remiss in not saying that the Town should have let Ray Villafane take it over right now.
Councilwoman Cheryl Kroyer wanted to state on the pubic record that Mr. Orrico was misinformed about how the contract works. Villafane Studios wasn't ready to take it over in terms of being able to handle an event of that size. They wanted to give Ray a chance take it over slowly, so that when it does become all his, he's equipped to do it and knows what all is involved. The contract is written in such a way that he doesn't take a penny until Carefree takes its money, whether that happens in year 1, 2, or even in year 3. The Town was very conservative in estimating the profit. They will be charging admission for the first time. As many safeguards were set up as possible.
Yes, they are trying to get people up here to support all the merchants so everyone can be successful. "We get to every one of the merchants, either in person or we send out emails, and we ask them if they want to be involved. And we help them with ideas about how to be involved. We can't force them to be involved. In a lot of cases people just go, 'Well, I don't care. I don't want to do it.' We've had a lot of ideas about how to get people in the stores and then they go, 'Well I don't want all those people in my store.' "
The Town is reaching out to the business community, trying to give them opportunities to profit from this event. "If they are not willing to, for whatever reason, all we can do is try to get people up here." Ms. Kroyer said they are trying to protect the merchants and the Town. She noted that the time to have had this discussion was 3 months ago and not that night.
Mayor Peterson echoed Ms. Kroyer's assessment. He said they had a number of options. One was to turn it over to Ray. The Mayor believed that, "With no experience running an event, he's an artist, it would have failed". This way, he gets to evolve, with training from the Town in how to run the event. It safeguards the Town's money. "Cheryl is absolutely correct. The contract is written in such a way that Ray gets nothing until Carefree is reimbursed entirely."
Mr. Orrico agreed that was true, then said, "My concern is that somewhere down the road we get reimbursed for all the money that we put out. We've hemorrhaged money for the last 3 years total".
Councilman Mike Krahe responded, "And I would argue that we didn't hemorrhage money. We spent money, and the results are now being seen. We have the Hampton Inn that's coming here. Mr. Orrico interrupted, "Wait, hold it!" Dr. Krahe said, "Gene, I'm not done. Excuse me, I'm not done."
"When I talked with them, they're coming because they see something happening up here. This is becoming a destination again. 15 years ago it was buses of people. Now it's different, so we have the Hampton Inn; we have Civana that's showing up. We now have town homes that will be coming in. We have Keeler's; we have a new pizza place. I just ran into a developer yesterday who wants to open another restaurant up here. And they're all saying it's because they see what's going on up here. And the Pumpkin Festival was part of that regeneration. And I think, in my opinion, it was the dollars that were invested to start to make this place a place, a destination where people want to come, they want to stay, and they want to live. They want to have a nice meal, and more choices of meals. And I think we've come a long way, at least on my time on the Council."
"Monday morning quarterbacking is real easy to do. And I'm not saying that that is what Mr. Orrico is doing, I'm simply saying you can always look back saying, 'Oh, I should have done this.' I think we've been very responsible with our budget for many, many, many years. We've been very forward thinking for many, many, many years. We've got $10 million in the bank. That's not a bad deal. I think we've done right for a long time and we've worked hard to do that. And I think we're starting to see the results. I'm fully in favor of this budget and the direction we're taking. And I want that on the record."
Mr. Orrico said, "Hampton Inn didn't come here because of the Pumpkin Festival. We were 2nd choice, OK, and we'll just end it there. I don't want to get into no discussion". Dr. Krahe said, "Well, I have to respond because we were NOT 2nd choice. They told us that they got tired of dealing with the people down there. And when they came here, they fell in love with what we are. That's what I was told. That means we were not second choice."
Councilman Vince D'Aliesio said, "Gentlemen, I think the big thing is that we had 3 months to go through this. We went line by line with each department and we were given opportunities to ask questions. We asked questions. Now, a majority of us attended every one of those meetings, and that was the time to get all of this ironed out, which we did".
Mayor Peterson asked for a motion to approve the budget. Ms. Kroyer made the motion and Dr. Krahe seconded it. The Mayor noted that it is unusual, but he requested a role call vote, with each Council member giving a summary of the reason for their vote. Mayor Peterson felt this is the most important thing they do, literally, because it's the implementation of their strategy. "Seriously, if we say this is where we want to head (pointing up), and we fund it down here (pointing down), we're not serious about where we want to head. This is 'put your money where the growth areas are, where what's proven to work for the town, for the residents, for the merchants here.' So, I'd like to do a role call vote on the motion that's on the table to approve."
Councilman Orrico voted no for the reason he already stated. Councilman D'Aliesio voted yes.
Vice Mayor Crane said, "The budget gives us the flexibility to do the things we need to do, whether it's the ability to address the water, other safety like street crossings, signage to help the merchants, roadwork that needs to be done and was put off, the marketing side." He has thought long and hard about this. "We are not in the entertainment business, we're in the economic development business. Now we have the opportunity to extract the Town from the entertainment business in a controlled way, to hand it over to someone who will assume it over the course of the next 2-3 years, hopefully in a successful way. Because if we just throw it in his lap and he fails, it's a reflection on our town, and we certainly don't want that. And it has a great economic financial recovery model for us, so it's a great way to approach the problem." The Vice Mayor voted yes.
Councilman Mike Krahe voted yes for the reasons already on the record.
Councilwoman Cheryl Kroyer told Gary Neiss that the process this year was very helpful. They had the chance to get into every aspect of the budget. Through the 3 workshops, they had a chance to see everything, to ask questions, to have input, and to ask for changes where they thought changes were needed. She felt very comfortable with this budget, saying it was probably the best and most thought out budget out of any with which she had ever been involved. The process was wonderful. She voted yes.
Councilman Stephen Hatcher agreed that Gary did an excellent job on this. The whole sequence and analysis took a lot of time. They spent many hours tearing it apart and putting it together, finding out where some dollars could be taken and reallocated to specific divisions. They went through every division for equipment and personnel resources, and made some good calls. He supported the budget. "If we all sit back and look at the big picture, with development and the introduction of restaurants, a hotel, and other things happening with the town, we must be doing something right. Because people are coming here and coming for a reason; because they believe in the town, they believe in us, and that they're getting the right support from us." He concurred with Vice Mayor Crane that they are not in the entertainment business. They are moving out of it and he thought the process was the way to go, because if it's dumped on Ray, it won't be back the following year, and that's not right. He voted yes.
Mayor Peterson commented, "As I look at the numbers that come in on the business, the Town's business, and this is a complex business that has many legal ramifications and restrictions and requirements, etc., and I look at the positives that we have, we're up 10% on sales tax revenue, we have $10 million in the reserve funds. We're investing in the roads, we're investing in countless things that are happening right now. Strengthening the Water Company. And I look to the future, the next 1, 2, 3 years, and the impact of the things that are happening, and the prospects we have that we really haven't had a chance to talk about. I sense that all of the numbers are pointing that we're going in the right direction. I'd like to thank the staff, and Gary in particular. Jim (Keen) has been immensely helpful. We have sent 9 hundred thousand questions about finances and 'what ifs' to him. I vote yes.
The motion to approve the 2019/2020 budget passed 6-1. The new fiscal year starts July 1st.
https://vimeo.com/340793652
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 #755, June 7, 2019
Mayor Les Peterson thanked everyone for coming, and called the budget meeting to order. Gary Neiss presented much the same budget information that was presented last month at the adoption of the budget bottom line, so I will not repeat it. The presentation including that information is in the first part of the video at the bottom.
Other than some comments he made during his presentation, I will concentrate on the discussion between the Council members.
Mr. Neiss described how the Town is getting out of the "entertainment business". 2/3 of the marketing budget was earmarked for the Pumpkin Festival. The Town will be turning the event over to Villafane Studios over a gradual 3 year period. There is a "call back agreement" with that, stating if there is a deficit this year or next year, Villafane Studios will reimburse the Town the 3rd year. A mechanism is in place that ensures whatever Carefree spends will be recaptured at the tail end. It is a very good agreement that gets Carefree out of the Pumpkin Festival event business but continues to celebrate our signature event.
The major change in Mr. Neiss' presentation is that, as of the end of the April financial reconciliation, the reserve account has increased to almost $10 million, the highest level ever. This is the result of restraint, good planning, and good management. Now, the Town will be reinvesting some of that money into Carefree's infrastructure. Carefree's residents will see some very positive impacts over the next several years as a result of this.
Councilman Gene Orrico wanted to explain why he was the only person who voted against the budget bottom line at the May meeting. He was opposed to the marketing budget. He praised Marketing Director Beth Renfro, saying she was the finest marketing director Carefree has ever had.
He noted that the Town had already signed the contract with Villafane Studios, so it was "set in stone". But the Town is waiting until 2020 to get out of the Pumpkin Festival. "Actually, what we should have did was we should have let Mr. Ray handle it right now, instead of us funding everything and hoping we get back that negative amount. There will be a negative amount at 2020. And if we don't get it back, what recourse do we have?"
Mr. Orrico stated that if you want 100% of the gain, you should take 100% of the risk. That's what he did as a business person. "Right now, basically we're covering all the risk and whatever we get back if there is a deficit, he ends up taking, and should be reimbursed to us." If there is a deficit the 2nd year, then he should reimburse Carefree on the 3rd year for the 1st and 2nd years.
He believed that Carefree was remiss in not saying, "Hey, take it over right now, get 100% of the profits, if we truly believe there is going to be a profit. I hope, for the sake of the residents of Carefree that there is a profit, because we have been hemorrhaging money on the Pumpkin Fest and it has not helped very many of the merchants". He said he talked to many of the merchants. People come to the "carnival-like Pumpkin Festival", but are not going to the merchants other than maybe a couple of restaurants. Black Mountain Coffee Shop does well, and possibly Venues. The purpose is to help the merchants.
It's a wonderful event "but it isn't taking and generating any kind of cash for us". He talked about the money spent over the past 3 years on staff time, equipment, and merchandise. He said he was remiss in not saying that the Town should have let Ray Villafane take it over right now.
Councilwoman Cheryl Kroyer wanted to state on the pubic record that Mr. Orrico was misinformed about how the contract works. Villafane Studios wasn't ready to take it over in terms of being able to handle an event of that size. They wanted to give Ray a chance take it over slowly, so that when it does become all his, he's equipped to do it and knows what all is involved. The contract is written in such a way that he doesn't take a penny until Carefree takes its money, whether that happens in year 1, 2, or even in year 3. The Town was very conservative in estimating the profit. They will be charging admission for the first time. As many safeguards were set up as possible.
Yes, they are trying to get people up here to support all the merchants so everyone can be successful. "We get to every one of the merchants, either in person or we send out emails, and we ask them if they want to be involved. And we help them with ideas about how to be involved. We can't force them to be involved. In a lot of cases people just go, 'Well, I don't care. I don't want to do it.' We've had a lot of ideas about how to get people in the stores and then they go, 'Well I don't want all those people in my store.' "
The Town is reaching out to the business community, trying to give them opportunities to profit from this event. "If they are not willing to, for whatever reason, all we can do is try to get people up here." Ms. Kroyer said they are trying to protect the merchants and the Town. She noted that the time to have had this discussion was 3 months ago and not that night.
Mayor Peterson echoed Ms. Kroyer's assessment. He said they had a number of options. One was to turn it over to Ray. The Mayor believed that, "With no experience running an event, he's an artist, it would have failed". This way, he gets to evolve, with training from the Town in how to run the event. It safeguards the Town's money. "Cheryl is absolutely correct. The contract is written in such a way that Ray gets nothing until Carefree is reimbursed entirely."
Mr. Orrico agreed that was true, then said, "My concern is that somewhere down the road we get reimbursed for all the money that we put out. We've hemorrhaged money for the last 3 years total".
Councilman Mike Krahe responded, "And I would argue that we didn't hemorrhage money. We spent money, and the results are now being seen. We have the Hampton Inn that's coming here. Mr. Orrico interrupted, "Wait, hold it!" Dr. Krahe said, "Gene, I'm not done. Excuse me, I'm not done."
"When I talked with them, they're coming because they see something happening up here. This is becoming a destination again. 15 years ago it was buses of people. Now it's different, so we have the Hampton Inn; we have Civana that's showing up. We now have town homes that will be coming in. We have Keeler's; we have a new pizza place. I just ran into a developer yesterday who wants to open another restaurant up here. And they're all saying it's because they see what's going on up here. And the Pumpkin Festival was part of that regeneration. And I think, in my opinion, it was the dollars that were invested to start to make this place a place, a destination where people want to come, they want to stay, and they want to live. They want to have a nice meal, and more choices of meals. And I think we've come a long way, at least on my time on the Council."
"Monday morning quarterbacking is real easy to do. And I'm not saying that that is what Mr. Orrico is doing, I'm simply saying you can always look back saying, 'Oh, I should have done this.' I think we've been very responsible with our budget for many, many, many years. We've been very forward thinking for many, many, many years. We've got $10 million in the bank. That's not a bad deal. I think we've done right for a long time and we've worked hard to do that. And I think we're starting to see the results. I'm fully in favor of this budget and the direction we're taking. And I want that on the record."
Mr. Orrico said, "Hampton Inn didn't come here because of the Pumpkin Festival. We were 2nd choice, OK, and we'll just end it there. I don't want to get into no discussion". Dr. Krahe said, "Well, I have to respond because we were NOT 2nd choice. They told us that they got tired of dealing with the people down there. And when they came here, they fell in love with what we are. That's what I was told. That means we were not second choice."
Councilman Vince D'Aliesio said, "Gentlemen, I think the big thing is that we had 3 months to go through this. We went line by line with each department and we were given opportunities to ask questions. We asked questions. Now, a majority of us attended every one of those meetings, and that was the time to get all of this ironed out, which we did".
Mayor Peterson asked for a motion to approve the budget. Ms. Kroyer made the motion and Dr. Krahe seconded it. The Mayor noted that it is unusual, but he requested a role call vote, with each Council member giving a summary of the reason for their vote. Mayor Peterson felt this is the most important thing they do, literally, because it's the implementation of their strategy. "Seriously, if we say this is where we want to head (pointing up), and we fund it down here (pointing down), we're not serious about where we want to head. This is 'put your money where the growth areas are, where what's proven to work for the town, for the residents, for the merchants here.' So, I'd like to do a role call vote on the motion that's on the table to approve."
Councilman Orrico voted no for the reason he already stated. Councilman D'Aliesio voted yes.
Vice Mayor Crane said, "The budget gives us the flexibility to do the things we need to do, whether it's the ability to address the water, other safety like street crossings, signage to help the merchants, roadwork that needs to be done and was put off, the marketing side." He has thought long and hard about this. "We are not in the entertainment business, we're in the economic development business. Now we have the opportunity to extract the Town from the entertainment business in a controlled way, to hand it over to someone who will assume it over the course of the next 2-3 years, hopefully in a successful way. Because if we just throw it in his lap and he fails, it's a reflection on our town, and we certainly don't want that. And it has a great economic financial recovery model for us, so it's a great way to approach the problem." The Vice Mayor voted yes.
Councilman Mike Krahe voted yes for the reasons already on the record.
Councilwoman Cheryl Kroyer told Gary Neiss that the process this year was very helpful. They had the chance to get into every aspect of the budget. Through the 3 workshops, they had a chance to see everything, to ask questions, to have input, and to ask for changes where they thought changes were needed. She felt very comfortable with this budget, saying it was probably the best and most thought out budget out of any with which she had ever been involved. The process was wonderful. She voted yes.
Councilman Stephen Hatcher agreed that Gary did an excellent job on this. The whole sequence and analysis took a lot of time. They spent many hours tearing it apart and putting it together, finding out where some dollars could be taken and reallocated to specific divisions. They went through every division for equipment and personnel resources, and made some good calls. He supported the budget. "If we all sit back and look at the big picture, with development and the introduction of restaurants, a hotel, and other things happening with the town, we must be doing something right. Because people are coming here and coming for a reason; because they believe in the town, they believe in us, and that they're getting the right support from us." He concurred with Vice Mayor Crane that they are not in the entertainment business. They are moving out of it and he thought the process was the way to go, because if it's dumped on Ray, it won't be back the following year, and that's not right. He voted yes.
Mayor Peterson commented, "As I look at the numbers that come in on the business, the Town's business, and this is a complex business that has many legal ramifications and restrictions and requirements, etc., and I look at the positives that we have, we're up 10% on sales tax revenue, we have $10 million in the reserve funds. We're investing in the roads, we're investing in countless things that are happening right now. Strengthening the Water Company. And I look to the future, the next 1, 2, 3 years, and the impact of the things that are happening, and the prospects we have that we really haven't had a chance to talk about. I sense that all of the numbers are pointing that we're going in the right direction. I'd like to thank the staff, and Gary in particular. Jim (Keen) has been immensely helpful. We have sent 9 hundred thousand questions about finances and 'what ifs' to him. I vote yes.
The motion to approve the 2019/2020 budget passed 6-1. The new fiscal year starts July 1st.
https://vimeo.com/340793652
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.