May 27, 2010, 6:35 PM EDT
The City of Glendale made good on the $25 million promise it made to the NHL for loses the league dealt with regarding the sale of the Phoenix Coyotes. The Arizona Republic has details on the situation, including where exactly the money is coming from.
The money in the enterprise funds comes from fees paid by businesses and residents for public services such as trash, water and sewer, landfill and housing. The fund absorbs revenue shortfalls in enterprise departments such as water and sewer, repays debt for capital projects and covers the cost of regulatory requirements, according to the city.
Art Lynch, the city’s former chief financial officer who now consults with the city, insisted this week that tapping into the enterprise fund is not using taxpayer dollars. Rather, it is a fee paid by residents and businesses who use city services.
The city transferred $25 million out of the enterprise account and into an account which the NHL can begin to draw upon in September, under the deal between the league and Glendale signed May 20.The city agreed to pay the NHL for “actual cash losses” for the team and the arena management that could start accruing in July.
The agreement states that Glendale is off the financial hook if the city finds a viable owner, approved by the NHL, by Dec. 31.
Obviously, the sale of the Coyotes is still in a state of flux. There might be more than two potential buyers, but Ice Edge or Jerry Reinsdorf’s group still seems the most likely to be the team’s owners if they stay in the Phoenix area. At least at the moment. Up might be down and vice versa by next week.
It’s nice to hear that taxpayers aren’t going to take on the burden of paying the debts. It’s clear that the Coyotes’ longterm home is still a blurry vision, but it’s not necessarily a guarantee that they won’t stay in the desert.
As always, we’ll keep you up to date regarding this situation as the tide turns again and again and again …
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