A Fortune Runs Through It

Tempe has long given the impression its Rio Salado project costs $45 million. The actual taxpayer tab could surpass $200 million.

Hallman says the city can no longer afford to make Rio Salado its top spending priority.

The $3.3 million operation and maintenance budget for Town Lake is approaching the size of the city's entire parks and recreation budget of $4.2 million and is triple the amount of money the city spends on community charities.

"Rio Salado should be done as we can afford it," he says. "But it shouldn't be done at the expense of the things that are vitally important to the city."

Neil Giuliano has staked his political career on Rio Salado and Town Lake.
"When I ran for mayor in '94, I ran saying I was going to be aggressive in pursuing how we would make this dream a reality," the 42-year-old Arizona State University administrator says.

Giuliano's not about to back away from Rio Salado in the face of a challenger who would attack the city's management of the project.

"The moons have aligned correctly for this," Giuliano says. "We have really been very fortunate. Everything has fallen in place in a very positive way."

The city, Giuliano says, has delivered to residents a wonderful recreation facility that eventually will attract more than $1 billion in private development.

Town Lake, he insists, was built without raising taxes--although he admits the 1993 sales-tax boost has helped finance the lake. He is vehement in his contention that the project has been absorbed into the city's budget without having an impact on other city operations.

"I feel very strongly that we haven't let anything go in the City of Tempe," he says. "Each of our other 40 parks in Tempe are as nice and well-kept as they ever have been."

Giuliano says the city has made improvements to the library, built two new recreation centers, a police substation and a fire station in the past few years during the peak of spending for Rio Salado.

"I don't think we have neglected other needs of the city," he says.
At the same time, Giuliano says the city's financial condition couldn't be much stronger.

"All of our reserves are at capacity now," he says.
The city, he says, is so flush with cash that it is pulling funds out of reserve accounts to pay for capital improvements rather than incurring further debt.

"Our financial situation in the City of Tempe is in the top 1 percent of cities in the U.S.," Giuliano says.

Rio Salado's critics, he says, represent a small number of Tempe residents. A survey last winter found only 11 percent of city residents thought Tempe was spending too much on Rio Salado.

But since the city has never released a detailed public accounting of the project, it would seem difficult for the public to know how much is too much.

Giuliano, however, says the Tempe electorate is extremely well-informed. Voters, he says, should have surmised by now that Rio Salado was costing far more than $45 million--even though that's the number the city's public relations arm regularly cites.

"I think anyone from the public who has monitored the project and kind of observed what we have done over the last 10 years would understand that," Giuliano says.

Few residents have closely followed city actions over the past decade, with the possible exception of Hallman, who is poised to attack the mayor for letting Rio Salado costs mushroom.

Giuliano will also face criticism if the Peabody Hotel deal collapses. Giuliano has strongly supported the Peabody development project since its inception and was against placing a deadline on the company to begin development.

But Hallman rammed the deadline through the council last summer. Peabody's February 1 drop-dead date to begin construction couldn't come at a worse time for Giuliano--a little more than a month before next spring's mayoral election.

If Peabody bails on the project, Tempe will be forced to spend millions of dollars on lake operating expenses that Peabody had promised it would be paying by now.

Giuliano brushes off the specter of Peabody's ghost looming during an election campaign.

"I will be extremely disappointed that they weren't able to go through with this project and perform as we had hoped," he says. "But we will accept the fact they won't be performing and move on to find another partner."

If Peabody departs, expect Hugh Hallman to say it's time for Tempe to move on and find another mayor.

Town Lake will not come without restrictions.
There's no fishing.
There's no swimming.
There's no motor boating.

Sailboats, paddleboats and water craft powered by electric engines are welcome.

The restrictions are in place for at least a couple of years until the lake's water quality is stabilized.

"The actual water quality and ecological balance in Town Lake will not be completely known for some time, possibly even years after the lake is initially filled," a report prepared by an environmental consultant, CH2MHill, states.

The city plans to spend about $350,000 a year actively managing the lake's water quality. There are concerns that the lake from time to time might develop rather noxious conditions.

The 1996 CH2MHill report succinctly outlines some of these concerns about certain aquatic life:

"For instance, under certain conditions, blue-green algae grows and dies in mass. Then it stinks, producing unpleasant gasses until the gasses give it enough buoyancy to rise to the surface in large, foul-smelling mats.

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