Glendale Memorial Park Cemetery Chris Anaradian, Assistant City - - PowerPoint PPT Presentation

Glendale Memorial Park Cemetery

Chris Anaradian, Assistant City Manager James Milanese, Engineering Administrator

Background

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• 1962 – City takes ownership from the Glendale

Memorial Cemetery Corporation

– The Agreement stipulated

• The property shall only be used for cemetery purposes
• Included transfer $12,831 in cash and $40,005 in securities
• Contemplated city could use funds to support other city
• perations
• Does not preclude the sale of cemetery or its assets

Background

3

• 1985 – City created Cemetery Perpetual Care

Fund (CPCF) and a Cemetery Enterprise Fund

– All revenues from the cemetery would be deposited into the CPCF; all expenses to be charged out of the General Fund – A recognition that the cemetery should act as an enterprise and recover its costs

Background

4

• 1998 – Council adopts Ordinance 1982 modifying use for the

CPCF – Would allow for withdrawals for expansion of cemetery – Council authorizes $99,000 purchase of “caretaker” residence to be paid out of the general fund and reimbursed by the CPCF

• 2001 – $265,000 approved by Council to expand cemetery; never
• ccurred

Background

5

• 2003 – Council adopted Ordinance 2330 modifying the CPCF

– Revenues would no longer be deposited to the CPCF – Possible use of the CPCF expanded to include any revenue generating activities

• 2018 – Consultant to review operations and make recommendations

– Improvements to be near revenue neutral were possible, but expensive and time consuming – Sale of property was possible

Strategic Imperatives

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• Focus on municipal core services
• Improve customer experience and service levels
• Discontinue general, special revenue and

enterprise fund subsidies

• Improve ongoing fiscal viability of the cemetery
• Ensure the historical and cultural integrity of

the site

• Develop successful civic partners

Operational Subsidy

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• Landfill / Solid Waste /Transportation

– Annual subsidy $60,000

• General Fund

– 18 years of all revenues going to the CPCF and all expenses coming out of the GF – estimated subsidy < $3.5 million – Since then, multiple years of operating loss absorbed by GF - $20,000/year – Improvements to site including 2017 repair of the perimeter masonry wall for $219,482 – Future capital repairs – unknown value

Fiscal Viability & Stability

8

• The cemetery has not been operated as an enterprise
• Rates have not been adjusted since 2009
• Yield from public CPCF is limited by statute
• ARS Title 32 - Regulations for municipalities are minimal

while private cemeteries are heavily regulated to ensure fiscal accountability and quality controls

• Private cemeteries are required to place endowment fund

(CPCF) in trust – principal cannot be withdrawn

Customer Service

9

• Grounds are well maintained
• This is a cemetery managed by Streets, with

sales by remote Field Operations staff

• Dated business model

– Services are only allowed Tuesday – Thursday – Limited marketing

Historical Stability

10

• Transition to best practices

– Celebrate cultural importance

• Memorial Day and Veteran’s Days are celebrated
• Our cemetery is not programmed on those holidays

– Encourage cataloguing – Support customer needs

• Full weekly services
• Investment in ash burial infrastructure

Civic Partnership

11

• Instead of competing with the private sector, we

welcome partners

The Buyer

12

• Glendale Memorial Park Cemetery LLC

– Buyer agrees to protect name of the cemetery – Managed by John Hassett

• Third generation cemetery owner and native Arizonan
• Owner of three Arizona cemeteries, a funeral home,

crematory, and pet cemetery/funeral home.

The Offer

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• Mr. Hassett will pay the City $100,000

– Honor all contractual obligations

• City will transfer assets and $3.8 M to a irrevocable

endowment trust – Merchandising Trust – limited to documented pre-need – Endowment Trust – withdrawals restricted to only interest earned and uses limited to cemetery maintenance

Perpetual Care Fund

14

• Current Value $5.8M with annual yield of <1%
• Proposed Value $3.8M with annual yield of 5-7%
• Consultant and buyer concurred $3.8M would ensure

the perpetual care of the grounds

• Privatized Endowment Care has significant restrictions

Operational Assurances

15

• Cemetery business sector highly regulated by state:

– 32-2194 (2) – Municipal cemeteries are exempt from below – 32-2194.03 – Requires demonstration of financial capability; background check for owners/management; – 32-2194.04 – Requires contract disclosures – 32-2194.09 – Allows for civil liabilities

• Buyer will maintain Glendale resident discount

Perpetual Care Assurances

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• Perpetual care fund highly regulated by ARS:

– 32-2194.24 – Buyer will have to prove an irrevocable trust prior to operating (the city will only transfer into this acct) – 32-2194.27 (1) – Trustee can have no financial interest in the cemetery – 32-2194.27 (2) – Only the interest income from the trust can be spent; can only be spent on care of existing plots – 32-2194.28 – Requirement to deposit portion of sales of graves, niches, and crypts into trust

Process

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• August 7th, Community Meeting held
• August 13th, Council Workshop
• August 27th, with consensus, Sale Agreement scheduled
• Transition should take approximately 60-90 days
• Information about the sale to be posted on the website,

at the cemetery, and given to customer service teams

• Copies of all records will be transferred to the buyers
• We will work with the buyer to notify all pre-need

customers

• Repeal of Chapter 11 effective after transition

Exhibit A – Operating Expenses

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*Includes cost of perimeter wall

FY2018-19 Operating Expenses

Description Actual Salaries and Benefits $ 131,908 Professional and Contractual $ 3,970 Cell Phone Charges $ 353 Utilities $ 25,006 Electricity $ 13,949 Telephone Utilities $ - Shop Charges $ 11,414 Fuel - Shop Chargebacks $ 1,128 Uniform Supplies $ 755 Drygood and Wearing Apparel $ 286 Purchase for General Public $ 15,593 Line Supplies $ 15,296 Equipment Less $5,000/Unit $ 1,989 Equipment-Vehicles $ - Fire and Liability Insurance $ 4,993 Worker's Comp Premiums $ 1,580 Technology Charges $ 4,981 TOTAL $ 233,200 Cemetery Operating Earned Spent Subsidy Deficit FY2018-19 $ 199,228 $ 233,200 $ 62,301 $ (96,272) FY2017-18 $ 198,069 $ 281,342 $ 61,367 $ (144,641) FY2016-17 $ 194,730 $ 228,357 $ 279,928* $ (313,555) FY2015-16 $ 187,491 $ 223,580 $ 59,540 $ (95,628) FY2014-15 $ 180,161 $ 199,161 $ 58,646 $ (77,647) FY2013-14 $ 213,286 $ 189,677 $ 57,767 $ (34,158) FY2012-13 $ 231,485 $ 195,791 $ 56,900 $ (21,207) FY2011-12 $ 201,476 $ 239,053 $ 56,047 $ (93,624) FY2010-11 $ 200,283 $ 201,462 $ 55,206 $ (56,385) FY2009-10 $ 163,303 $ 212,529 $ 54,378 $ (103,604) Average Profit/Loss $ (103,672)

Exhibit B – CPCF

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Perpetual Fund Ending Balance Interest earned Principal Dollar Amount Yield FY2018-19 $ 5,815,000 $ 50,000* 0.86% FY2017-18 $ 5,810,000 $ 70,000 1.20% FY2016-17 $ 5,740,000 $ 47,000 0.82% FY2015-16 $ 5,693,000 $ 32,000 0.56% FY2014-15 $ 5,661,000 $ 24,000 0.42% FY2013-14 $ 5,637,000 $ 21,000 0.37% FY2012-13 $ 5,619,000 $ 18,000 0.32% FY2011-12 $ 5,604,000 $ 15,000 0.37% FY2010-11 $ 5,576,000 $ 28,000 0.37% FY2009-10 $ 5,540,000 $ 36,000 0.37% * Estimate Cemetery Subsidy Analysis FY1986-87 $ 88,935.00 FY1987-88 $ 76,568.00 FY1988-89 $ 88,936.00 FY1989-90 $ 83,152.00 FY1990-91 $ 99,174.00 FY1991-92 $ 101,289.00 FY1992-93 $ 108,659.00 FY1993-94 $ 110,913.00 FY1994-95 $ 132,570.00 FY1995-96 $ 147,000.00 FY1996-97 $ 283,207.00 FY1997-98 $ 331,238.58 FY1998-99 $ 363,469.31 FY1999-00 $ 349,286.27 FY2000-01 $ 546,836.05 FY2001-02 $ 558,123.35 Total $ 3,469,356.56 Data from CAFR is in the thousands