By Matthew Hendley
By Monica Alonzo
By Monica Alonzo
By Monica Alonzo
By Stephen Lemons
By Jason P. Woodbury
By Dulce Paloma Baltazar Pedraza
By Ray Stern
Alice in 1984
When you run the best-managed city in the universe, you will stop at nothing -- including surreal bookkeeping -- to maintain the image. Such is the case with Phoenix bureaucrats, who decided to nip the costly Celebration 2000 embarrassment in the bud(get) by cooking the books and, yes, declaring expenses as profits.
The Flash is conflicted. Is this Orwellian? Or merely Carrollesque?
More than two months have passed since the city's panic-stricken hirelings issued a $527,000 check -- sans city council approval -- to cover burgeoning expenses for the New Year's Eve bust, er, bash. Those expenses were the responsibility of a private, nonprofit group, Citizens for a Community Celebration (CCC).
The city Parks, Recreation and Library Department asked the council to retroactively approve the expenditure in early January. Yet the questionable outlay has not been placed on the council's agenda. Must be a Y2K problem. Deputy city manager Alton Washington, who is responsible for organizing the agenda, did not return a call seeking comment.
Meanwhile, the city and the CCC are manipulating financial statements to make it appear that both organizations profited from the event.
Records show that Phoenix actually faces a loss exceeding $1.1 million.
Deputy city manager Jack Tevlinvowed during a December 28 press conference that the city would not advance any money to cover event expenses without first obtaining council approval. "It's not something that we will do without council approval," Tevlin had said.
He was sonot correct. When Tevlin made that pledge, city finance director Kevin Keoghhad already cut a $527,000 check, on December 17, and placed it into a special account at Bank One -- without city council authorization.
We don't need no steeenking authorization.
Parks department official Dale Larsensays his office asked for the money because entertainers and production crews were threatening to boycott the event unless they were paid in full, in advance. The CCC -- whose members were appointed by Mayor Skippy Rimsza -- had bounced a $700 check in early December, bank records show.
"It was an emergency authorization from finance [department] to cover those bills," says Larsen. "Now, we're waiting on the . . . city council authorization that that was okay to do."
Records obtained last week show the finances for the event have now been divided between the city and the CCC, which was chaired by former state attorney general Grant Woods. The two balance sheets divide up revenue -- which came primarily from "loans" and "advances" from the city -- and expenses for entertainment, production and advertising in a way that allows both the city and the CCC to show a profit.
The city's balance sheet -- under the name Celebration 2000 -- has been jiggered to show a remarkable profit of $4,400 as of February 7. The private CCC, meanwhile, shows net income of $5,900.
How could the city and the CCC show a $10,300 profit from an event that drew fewer than 15,000 people and generated a whopping $165,000 from ticket sales, merchandise and concessions while expenses soared to more than $1.17 million?
Creative accounting, Phoenix style.
The city never intended to invest more than $25,000 in the event, records show. The council approved an additional $500,000 loan to the CCC last summer and voted in early December to sponsor a stage at the party by paying the CCC $150,000.
Even those allocations weren't enough to stem the tide of red ink, which led to the unauthorized December 17 expenditure of $527,000. Like the $500,000 loan last summer, the $527,000 was spent with the "understanding" it would be repaid from the proceeds of the event, Tevlin has said.
By converting the outlays to income, the city can subtract $1 million in expenses for entertainers and advertising -- including a whopping $50,000 ad bill from the Arizona Republic -- and show a profit.
This new math might explain why the council would rather avoid the $527,000 question. While unauthorized half-million-dollar checks and million-dollar losses ("income") still swirl unattended, the city has the temerity to congratulate itself for the event.
"I know that it took a huge amount of extra time and attention to make Celebration 2000 a great evening for Phoenix," City Manager Frank Fairbankswrote parks employees in a January 3 memo. The city is so thankful, it will throw employees a luncheon on March 6 at the Phoenix Museum of History, catered by Eddie Matney's. The fete will cost -- er, enrich -- the city to the tune of $1,500.
Even Secret Service agents, bomb-sniffing dogs and several hundred eager supporters can't bring much excitement to the Phoenix AFL-CIO headquarters. The meeting space is sandwiched between a beige tile floor and a low ceiling with fluorescent lights, squeezing all the joy from the room. Union workers are represented in sloganified tee shirts and worn jeans. They are patriotic Americans waiting for a pay raise -- or, at least, the promise of a pay raise and earned income tax credits.
On this night, Monday, Al Goreis coming to make such promises. The media have been corralled into a small section at the back of the room. "No wandering, no mingling," we are sternly warned. When one rebellious reporter cuts the white rope cordoning us off, a press pool wrangler who looks more like an Axis/Radius bouncer than a White House representative spies the breach and angrily ties up the loose ends -- there, that ought to hold 'em.