Save the Rodeo? Again? What’s that got to do with the effort to recall Mayor Phil Goode? Well, apparently the Recall Committee thinks the two are related. The latest angle in the never-ending “recall reason roulette” is that residents are hearing from petition circulators that recalling Phil Goode will save the rodeo. Now that paid circulators have been hired, is this yet another ruse to obtain the requisite number of signatures?
The rodeo-recall association should be no surprise since Stan Goligoski, who is running to serve in place of Mayor Goode (if the recall obtains enough valid signatures), is a founding board member of the Western Values Coalition.(1) This coalition, led by Karen Fann, surfaced on the Prescott political stage during the summer of 2023 as an advocate for Prescott Frontier Day’s (PFD) masterplan, and for the $15.3 million state appropriation to PFD with no strings attached.(2) This appropriation of our state tax dollars is now on hold and the subject of litigation.(3)
After reviewing PFD Inc.’s recent finances, maybe the Recall Committee has a point. Maybe the “rodeo” does need saving, but not because of Phil Goode.
In 2021 (former Prescott Mayor Greg Mengarelli’s first year as PFD Business Development Manager) PFD’s IRS 990 filing showed revenues of $1,283,402 and expenditures of $1,478,402—for a loss of $137,440. Only a $195,000 contribution from the Buckle Club kept PFD in the black.(4)
Then it gets worse. In the following year, their IRS 990 (4) shows they lost a whopping $349,026 despite robust and unprecedented charitable donations totaling $630,932.(5) And don’t forget, PFD only pays $1 per year to lease the rodeo grounds from city taxpayers AND it gets to keep all profits from PFD-managed events, gate receipts, parking, parade entry fees, dance tickets, food/alcohol sales and a cut on other events. The city subsidizes PFD marketing at $40,000 per year—and has also made one-time payments for expenses such as $36,500 for the 2022 masterplan and economic impact study and over $1.7 million for the 2017 engineering and electrical upgrades.(6)
PFD Losses 2021 and 2022
Year | Amount of Loss (revenue less expenses) | Offset By Buckle Club & Charitable Contributions | Net (loss) or Profit After Contribution |
2021 | ($137,440) | $195,000 | $57,560 |
2022 | ($994,307) | $630,932 | ($349,026) |
Note: See references for reported IRS data.(7)
Rodeo revenues over a 10-year period between 2012 and 2022 vary, with 2019 as the highest-grossing revenue year.(7) As expected, revenues in 2022 are higher than revenues in 2012. What is eye-popping is that expenditures in 2022 were 128% higher than expenditures in 2012.(8) On top of that, PFD obtained a $500,000 secured loan in 2021. That full liability appears again in 2022, suggesting there is no way for PFD to pay down this loan.(4,5) This begs the question, where is the money going? More importantly, is PFD’s business model sustainable? Mayor Goode is justified in questioning the long-term viability of renegotiating an extended lease (9) with PFD given its financial track record.
PFD Change in Revenue and Expenses 2012 Compared to 2022
2012 | 2022 | % change | |
Revenues (less charitable contrib.) | $979,071 | $1,307,691 | 34% increase |
All Expenses | $1,007,516 | $2,301,998 | 128% increase |
Note: Charitable contributions were removed from revenue in 2022 for an “apples to apples” comparison, since no charitable contributions were reported in 2012. See references for reported IRS data.(7)
Further, Mayor Goode is right to question why he and the rest of the Prescott City Council were left completely in the dark about the allocation of $15.3 million in state taxpayer money to PFD presumably intended for improvements to the city-owned rodeo grounds.(10) PFD President Ron Owsley’s comments to the Arizona Republic (10) make it clear that PFD intentionally kept knowledge of the appropriation a secret. Unfortunately, Tim Wiederaenders’ January 28, 2024 opinion piece(11) on the rodeo conflates what city leaders actually knew about PFD’s proposed capital improvements (12), with the closely held knowledge about the $15.3 state appropriation.
PFD counters concern about its finances by pointing to the economic benefit it provides. While there is no denying the Rodeo’s historic significance, efforts to quantify economic benefits produce arguable results depending upon the source. For example, the City of Prescott staff debunked a 2001 economic study associated with a prior effort to expand rodeo and equestrian activities.(13) The city’s analysis concluded that tax revenues are historically higher in the month of July when it’s hot in Phoenix. In other words, Prescott is a tourist destination for cooler temperatures; not the rodeo.
In 2023, PFD presented yet another economic study also claiming that the rodeo and related events generate a significant economic benefit(14). Economists are in strong agreement that sports subsidies (and rodeo is a sport) cannot be justified on the grounds of local economic development, income growth or job creation. Arguments in favor of subsidies are most frequently used by advocates like the group that prepared this latest PFD economic study. Perhaps this is why Tempe voters soundly defeated the construction of an arena for the Coyotes Hockey Team in May, 2023. (15)
Recalling Mayor Goode for performing his fiduciary role for taxpayers is nothing short of ridiculous. If you really want to “save the rodeo,” it’s time to scrutinize the financial health and management of PFD, Inc., the Buckle Club, and the PFD Foundation before taxpayers are on the hook for facilities that have limited use for anything but rodeo and equestrian events. Maybe we need to take a cue from Tempe and put PFD’s “masterplan” for the Rodeo grounds to a vote of the people. That might be a better expenditure of tax dollars than a recall election in search of a reason.
REFERENCES:
(1) As of the writing of this article, Stan Goligoski is listed as a Director for the Western Values Coalition on the Arizona Corporation Commission’s “Entity Page” https://ecorp.azcc.gov/BusinessSearch/BusinessInfo?entityNumber=23120942
Further, Goligoski is featured in a video for this organization https://www.westernvaluescoalition.org/
(2) Arizona House of Representatives HB 2810 general appropriations act 2023-2024, item #86 (j) on page 23, “Appropriates the following amounts from the GF in FY 2024 to the State Treasurer for distribution to nonprofit organizations: $15,300,000 for a nonprofit volunteer organization that operates a rodeo at the Yavapai county fairgrounds.”
(3) The Arizona Center for Law in the Public Interest recently filed a lawsuit claiming this state appropriation is a violation of the Arizona Constitution’s Appropriations and Gift clause. State Treasurer Kimberly Yee stopped payment to PFD until this matter is resolved in court.
(4) IRS Form 990 for PFD, Inc. for years 2021 and 2022 were obtained through public records requests. All non-profit organizations are required to make their IRS income filings public upon request. PFD, Inc. filed for an IRS extension and did not complete its 2022 returns until November 14, 2023.
(5) PFD’s 2022 IRS 990 Schedule B shows a grand total of $630,932 in cash and non-cash donations from 61 individuals and one company. Cash donations make up the majority of the $630,932 itemized on Schedule B, with cash donations ranging in amounts from $5,000 to $50,000 per donation. In addition to Schedule B donations, PFD received an additional $229,766 in grants and contributions for a total of $860,698 (Line 8, “Grants and Contributions” 2022 IRS 990) The $860,698 includes Schedule B donations and additional items such as membership dues and the city’s annual $40,000 contribution.
(6) Lease Agreement Prescott Rodeo Grounds City Contract No. 2017-020, entered into on July 12, 2016 and recorded on July 22, 2016, Yavapai County Clerk Recordation #2016-0035686. The city paid $239,814 for engineering, $266,142 for arena lighting and $1,224,346 for grandstand electrical improvements in 2017 for a total project cost of $1,730,302, which amount was $330,302 over budget. Fann Environmental, Inc. was the successful bidder on the construction portion of the project, with a bid of $1,224,346. This was approved by the Prescott City Council on January 24, 2017.
(7) PFD, Inc. IRS 990 filings as published by the IRS. https://www.instrumentl.com/990-report/prescott-frontier-days-inc or received via a public records request. Until recent years, PFD’s revenues have consistently covered expenses, without charitable contributions.
[Editor’s Note: For full table, please go to this link https://azfpi.org/growth/the-rodeo-and-the-recall/ and see reference #7]
SUMMARY OF PFD, INC. IRS 990 REPORTING 2012 – 2022 (7)
NOTES: Schedule B Charitable Contributions were not reported prior to 2019. Buckle Club Contributions did not exist prior to 2021. The city’s current lease with the Rodeo grounds began in 2016 when the land was leased for $1 per year. PFD’s 2023 IRS 990 forms are not yet available.
(8) A 128% increase in business expenditures over an 11-year period would not be sustainable but for government subsidies—especially given that the average inflation rate for years 2012-2022 is 2.43%. https://www.statista.com/statistics/191077/inflration-rate-in-the-usa-since-1990/
The ongoing and one-time subsidies identified in this report are, and were, paid for by Prescott taxpayers.
(9) In 2023, PFD requested that the City of Prescott approve a 99-year lease with two 20-year extensions.
(10) Arizona Central May 23, 2023 article by Ray Sterns, “Ron Owsley, the nonprofit’s president, acknowledged that the mayor was “pretty upset” over being kept in the dark about the state money, but also said the rodeo officials ‘certainly kept it quiet’ when they began working with legislators on it. That was a business decision to prevent anyone else from ‘cutting up the pie, he said.’” Prescott Daily Courier May 15, 2023 article by Debra Winters, “Despite the city being a stakeholder, I wasn’t even consulted by anyone from the state regarding funding, especially not having any kind of agreement with the rodeo,” Goode said late last week. “Especially being a long-term plan [sic], they just assumed the city would be on board with this. There was no decency to double-check with us. I was very disturbed by the way it happened.”
(11) Prescott Daily Courier, January 28, 2024, “Prescott rodeo improvements: Setting the record straight” by Tim Wiederaenders.
(12) The Prescott City Council received a briefing from PFD at a March 28, 2023 public study session that included a discussion of the proposed capital improvements to the rodeo grounds. PFD assured the City Council and the public, that funding for the improvements would come from private donations.
(13) 1/31/2001 Council Agenda Memorandum to Mayor and City Council from Larry Asaro, City Manager presented at Prescott City Council Study Session on February 6, 2001 critiquing the 2001 Lovell Rodeo Economic Impact Report and the use of economic multipliers, states, in part, “Based on this adjusted calculation, the revenues received may be about one-fourth of what the Rodeo report indicates.” The report further discusses impacts in July from the rodeo itself: “Unfortunately, while July is a high sales tax return month it does not show any increase in taxes at the level suggested in the Rodeo report.”
(14) March 21, 2023 Memorandum from the Rounds Consulting Group, Economic Impact of the Prescott Rodeo, an update to March 2022 study and March 2022 Economic Impacts of the Prescott Rodeo Grounds, prepared for Prescott Frontier Days, Inc. by Rounds Consulting Group located in Tempe Arizona. As of the writing of this document, the Rounds Study is available on the 1888 Buckle Club’s website https://1888buckle.club/plans-reports-and-documents/
(15) ”Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega-Events? Dennis Coates and Brad R. Humpreys, August 2008 is the seminal literature review on the topic of subsidies.
(16) Arizona Republic, May 16, 2023, “Coyotes concede defeat after Tempe voters reject hockey arena deal,” Sam Kmack and Phil Boas opinion piece, “We’re done with fat cats. That’s why Tempe voters shot down the Arizona Coyotes arena. Opinion: There are many reasons Tempe voters rejected the Coyotes arena. First is disdain for pro-sports owners and their expensive tastes.”
4 thoughts on “Another Look Behind the Curtain – the Rodeo and the Recall – Deb Thalasitis, Mary Beth Hrin, and Toni Denis”
See the companion article on the rodeo grounds. It would be appropriate for Prescott city government taxpayers to pay for advertising “Rodeo Days” as it generates tourist interest in coming to Prescott. But subsidizing a private for profit event almost always benefits the “private” part. A contract for requiring the necessary insurance and maintenance to protect the town and the rodeo property should be enough.
First – Mengarelli’s need to be run out of town
This “new” investigation suggests ex state senator Karen Fann was instrumental in acquiring a huge taxpayer subsidy from the state taxpayers for a questionable public-private business venture. I seem to recall it was Karen Fann who started the campaign to back Ken Bennett for state senate to stop Steve Zipperman from winning the Republican primary. We taxpaying citizens had better wake up. That includes what we read in the “local” paper. I know they went after me running for a PV council seat. The “good ole boy’s (and girls)” strike again. Wake up people!
I’m surprised our community hasn’t dug deeper into Goligoski. It feels like he appeared on the school board out of nowhere with a familiar name and veteran credentials, telling us what we (especially as parents!!) wanted to hear. Now he’s running for mayor on the back of a faulty petition that he started. Does anyone else think that’s strange? I can’t find a real answer ANYWHERE about his true political beliefs!! I sure has heck don’t want a mayor who lied about bringing gender and race into our elementary schools, files petitions in poor faith and back-peddles on the points that got him elected in the first place!!
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