Pete Furman

Sedona City Council moves forward on Uptown parking garage planning – Sedona Red Rock News
Thirty residents and business owners spoke during public comments

The Sedona City Council directed staff to proceed with the design and pricing for the proposed Uptown parking garage during a six-hour-33-minute special meeting on Wednesday, Nov. 15, in order to consolidate Uptown parking and boost use of public transit.

Newest Numbers

The final results of the city’s latest parking assessment by consulting engineering firm Kimley-Horn found that Uptown experiences an average of roughly 32,000 vehicle trips per day, 26,000 of which they attributed to tourists and 1,000 of which they attributed to cars circulating looking for parking. Kimley-Horn representative Jeremiah Simpson estimated parking demand would exceed 85% of capacity on 50 to 60 days per year “for about a five-hour window” each day.

On this basis, and assuming 2.4% annual growth in demand, Kimley-Horn’s consultants projected a 10-year parking deficit of 185 spaces and recommended the city add between 185 and 317 new spaces.

Deputy City Manager Andy Dickey estimated that the ongoing expansion of I-17 will add an additional 200 cars per hour to Uptown traffic.

“I still don’t agree with the 2.4% aggregate average growth,” Councilman Brian Fultz said. Sedona’s population fell 7.6% between 2000 and 2020.

“That’s not tourists who are parking there, that’s employees,” Vice Mayor Holli Ploog said of current parking usage. Simpson agreed that 25% of Uptown parking demand is probably caused by employees of Uptown businesses. “Traffic stays relatively heavy” in off-peak months, Simpson noted.

Simpson added that only 13% of visitors to Uptown travel from more than 50 miles away. Conversely, 11.6% travel less than one mile, 8.2% travel one to two miles, 27.5% travel two to five miles and 20.1% travel five to 10 miles.

Councilman Pete Furman said that while the city’s 2005 parking study found a total of 1,435 public and private spaces in the Uptown area, that number had risen to 2,144 by the time of the 2019 study and 2,761 today. “You know what? We have made some progress,” Furman said.

Kimley-Horn also found that the average pedestrian was willing to walk only 0.3 to 0.4 miles from a parking spot to destination.

The current estimate for the cost of the garage is $16.7 million, rising to $20 million in five years. It will take two to two-and-a-half years for it to become operational.

“Most of the emails we’ve been getting from employees in support of the garage, they assume it’s free [to park there],” Ploog said.

“I would propose that this garage be a fee,” City Manager Karen Osburn said. She suggested, based on “back-of-the-napkin math,” that a $2 per hour fee would generate about $1.5 million in revenue, while the debt service cost would be under $1 million per year, “which means that this project could potentially contribute towards the provision of the free transit that we contemplate.”

Consolidation

Simpson estimated the closing of smaller lots throughout the city would eliminate approximately 230 parking spaces. The garage is currently planned to accommodate 272 spaces, for a net gain of 42 spaces, or a net loss of 38 spaces compared to completing the Forest Road site as a surface lot with 80 spaces.

“We have to be prepared to give up those lots in order to consolidate,” Fultz said. “There has to be consolidation … if we move forward with this, it doesn’t matter, we still need to go ahead and block off that parking as part of consolidation.”

“This, to me is about consolidation, not expansion,” Councilwoman Melissa Dunn said.

Consolidation “has to involve the removal of residential parking,” Ploog said.

“Consolidation is absolutely the main issue,” Councilwoman Jessica Williamson said.

Public Comment

Thirty residents and business owners and three members of the city’s garage study committee spoke during the public comment period, 22 of whom expressed support for the garage, including Randy McGrane, a co-owner of Best Western hotel; Mike Wise and Michelle Conway Kostecki of the Sedona Chamber of Commerce; Jesse Alexander of Sinagua Plaza; Julie Richard of the Sedona Arts Center; Tom Gilomen of the Cowboy Club; Ali Hansen and Eben Hartzenberg of Bennali: and Bobby Lerner of Sedona Trolley.

“It’s the right thing to do for the greater good of Sedona,” said Lonnie Lillie, of the Aiden Hotel.

“There really is a demonstrated need for the parking garage,” said Donna Helfrick, formerly of Pink Jeep.

“Centralized parking is an impossibility,” former Vice Mayor Ernie Strauch said, suggesting the city invest in a parking management system instead, a view echoed by three members of an ad hoc group calling themselves “Sedona Residents Unite.”

Two residents suggested that the garage would increase Sedona’s risk in the event of a wildfire and one suggested the property would be better used for a new Sedona Fire District fire station.

“After five months of participation, I believe the process led by Kimley-Horn and city staff was flawed,” said Joe Zani, one of the resident committee members. “Using Kimley-Horn’s analysis, there is no shortage of parking in Uptown today.”

Responding to the Sedona Residents Unite proposal that the city adopt a parking management system instead of the garage, Osburn said it was not a realistic option, noting several flaws, and stated that, unlike a garage, it would not support integration with the city’s planned transit system. Osburn also suggested that future parking pricing be used to “incentivize transit and disincentivize personal vehicles coming into Uptown.”

“It is much more closely aligned, timing-wise, with the implementation of transit,” Osburn said of the garage.

Transit expansion “needs to work hand in hand with parking,” Andrew Baird of Kimley-Horn said.

Council Debate

“We should continue to move forward with the garage project,” Fultz said. “There have really been a lot of bad arguments made, sunk-cost fallacy probably being No. 1 on my list … Is the garage the right answer? No, it’s not by itself, but part of a solution, yes, it can be.”

Fultz also called for resident-only parking on residential streets and an employee parking program.

“I’m all for it,” Dunn said. “It is the long pole as well as the key component in an overarching project.” She likewise called for the restriction of street parking.

“I came in here tonight very torn,” Ploog said. “I am not sure this even solves our problem … I think it will change Uptown and not in a really great way … it’s this massive building.” Nevertheless, she added, “you have convinced me that we are in a parking deficit.”

“I have been very strongly supportive of the parking garage,” Councilwoman Jessica Williamson said. “It will change Uptown? Good. Uptown needs to be changed.”

“We know it’s going to cost a lot more money than anybody wants to pay or thinks we should pay,” Williamson added.

“I’m supportive of us moving forward and getting the number. I am scared to death of it,” Furman said. He also pointed out that charging for garage parking would be a disincentive for redevelopment of existing paid lots.

“I think the garage will be a better utilization of parking than what exists now,” Kinsella said before also supporting a permitting system for residents and employees. “Development of that land is better in the hands of the city,” which will “have a commitment to being the best stewards.”

“I’m supporting it moving forward until we see the price tag,” Mayor Scott Jablow said. “We can’t solve traffic … we’re going to mitigate it by doing all these projects together.”

Without a vote, council then directed staff to proceed with the design of the garage.

Sedona City Council decides against ESG investment strategy – Sedona Red Rock News

Growth in the city of Sedona’s portfolio balance over the last three years. The city recently declined to adjust its investment strategy to include ESG values. Photo courtesy city of Sedona.

The Sedona City Council reached a consensus not to expand its investment management services agreement with PFM Asset Management to include decision-making based on “environmental, social and governance” values during its meeting on Wednesday, Oct. 11.

Annette Gaston and Sarah Walsh of PFM were on hand to discuss the city’s current investment strategy as well as options for incorporating ESG planning into that strategy.

“The portfolio as it is now has a very liquid makeup, and that’s something we would look to keep intact,” Gaston said.

The city’s investment balance of $78,575,586 as of July 31 is divided three ways, with 24% in money market funds, 26% in government securities and 49% in the state’s Local Government Investment Pool. The LGIP is an investment fund managed by the Arizona state treasurer to provide local governments with greater yield through pooling their assets.

The portfolio’s annual growth rate over the last three years was 13.9%.

Environmental, Social and Governance

ESG investing is an approach to making investment decisions that takes into account not only a company’s financial performance, but also its performance on a range of environmental, social and governance measurement scales. Environmental performance is measured using factors such as carbon footprint, pollution levels and contributions to deforestation, while the social component is scored on factors including human rights and diversity and the governance contribution involves elements such as bribery, corruption and executive compensation.

A company’s ESG performance is commonly scored on a 1 to 100 scale that “measures economic value at risk based on ESG factors.” A lower score means less risk.

“ESG is really just another way of performing risk management,” Walsh said.

Involvement in either a given industry or a specific business activity can also be used as an exclusionary criterion to eliminate companies as potential investments. PFM’s examples of such activities included involvement in the production of oil, coal, alcohol and drugs, weapons, contraceptives and pesticides.

“Are the places to proactively invest also considered?” Councilwoman Kathy Kinsella asked. “That’s a missing component, perhaps.”

“It’s more of a taking away what they’re doing bad rather than rewarding what they’re doing right,” Walsh said.

PFM has 210 companies on its approved issuer list.

“If you were to implement the example approach that I just walked through,” Walsh told the council, an example that had focused on firms with medium or low ESG risk and excluded firms dealing in fossil fuels, tobacco, pharmaceuticals and forestry products, the number of companies with which the city could invest through PFM would drop to 173.

“Are you going to make investments so that the yield, regardless of categories we might choose, is the same?” Councilwoman Jessica Williamson asked. “There would be no yield consequence to ESG decisions?”

“That’s correct,” Walsh said. “That’s what we’ve observed in portfolios that we manage for other entities.”

“There is, in the rumor mill, in the general anti-ESG messaging, that you should expect lower yields,” Vice Mayor Holli Ploog said.

“That’s not what we’re observing,” Walsh said.

“My experience in ESG is that [those funds] sometimes tend to underperform,” Councilwoman Melissa Dunn said.

Banking Services

One of the examples included in the PFM presentation involved Wells Fargo, the city’s current provider of banking services, which led to additional questions from council.

“Did you compare Wells Fargo with banks of similar size?” Ploog asked with regard to Wells Fargo’s ESG score.

“I believe Wells Fargo is one of the worst-rated banks out there … but I would have to look at the banks themselves,” Walsh said, before adding that overall Wells Fargo’s ranking was “very poor.”

“What’s the best banks?” Mayor Scott Jablow asked.

“I would have to look,” Walsh said.

“I would also want council to consider our experience as an institution with Wells Fargo, which has been phenomenal,” City Manager Karen Osburn said.

City Finance Director Cherie White said that “it is a good thing to do a banking services RFP” from time to time to keep the bank on their toes, but agreed with Osburn about the benefits of the city’s current arrangement.

“It is a pretty significant undertaking to change all the banking services,” White said.

“I think it’s something we should look at,” Jablow said, but suggested it be considered at a later date.

“I don’t think we should be deciding on which bank our staff has had very, very good relations with,” Williamson said.

Vetting

“My mind says I have questions, but I can’t formulate them,” Williamson said. “What does staff think?”

“I’m OK either way,” White said. “I was one of the ones that was a little hesitant until talking with PFM staff and finding out this isn’t really going to impact our yields.”

“I had some of the same concerns,” Osburn said. “I do still have a few others … On the environmental side of things, we’ve done a very extensive job of going out to the community and asking them … what we haven’t done is any kind of vetting in terms of social values.”

“You feel very comfortable going down an E path, not an ESG path,” Williamson said to Osburn. “You feel confident that [environmental] values for the community have been fairly established and the other two have not been and I would agree with you.”

“It seems like those are less subjective,” Osburn said. “We can speak very clearly to the engagement of the community.”

“I think that if we went down that path on such a topic, it would come back, and rightfully so, to bite us,” Jablow said. “That has me concerned.”

“It’s not clear to me that now is the right time,” Councilman Pete Furman said. “It’s not our money, it’s other people’s money, and we have a duty, in my opinion, about how we treat that money.”

“That we don’t have input about the S and the G very much takes those off the table,” Fultz said. “The environment piece, I’m actually uncomfortable with that … there’s discrepancies about how environment is actually considered … That Apple has this shining E-score makes absolutely no sense to me.”

Furman also suggested that attempting to determine community values “opens the door to discourse that will not be beneficial to harmony in the community.”

“I have a fiduciary responsibility to this community as a whole,” Dunn said. “We need to maximize the yield for the community because that’s what we said we were going to do.”

“I’m completely confused about the definitions,” Ploog said. “It doesn’t seem like we should be making any changes right now … I’m resistant about corporate [investment] to begin with, without even applying an ESG factor.”

Ploog also pointed out that the city had a negative return on its investments in 2022. The city’s investment loss in fiscal year 2022 was $2,475,192.

“That would be related to the LGIP,” White said, describing it as an “unrealized loss” that the city will recoup “when the market turns around.”

“I’m more comfortable in the E area at this point,” Kinsella said.

“I had no idea what you were talking about,” Williamson said. “I don’t see how we could change our investment policy without having any idea what we’re doing … I don’t want to second-guess my investment people … I support just the E.”

“I’m not comfortable changing to the ESG for all the reasons my counterparts have stated,” Jablow said. “We should not move forward with that.”