East Mesa Independent

Published: Aug 28, 2006 - 07:39:33 pm EDT

Nonprofit group demands answers from city staff

By Vanessa White, Independent Newspapers

Two weeks ago, the Valley Business Owners and Concerned Citizens Inc. nonprofit organization sent out a press release accusing City Manager Chris Brady of playing "Hide the Potato" when it came to pointed questions about the November utility bond election.

"We thought it was about time to lay out all of the maneuvers Chris Brady has taken to avoid our questions," said Fred Phillis, vice president and director of VBO, 8106 E. Broadway Road. "We called it ‘hide the potato’ because it was a circular issue of we asked questions, the city gave us documents, but we had to find out where the ‘potato,’ or answers, were hidden."

The VBO’s questions included inquiries about the interest and transactional costs to the city of the bonds, how bonds are being sold, conflicts of interest, payment schedules and reserve requirements. According to Mr. Phillis, the VBO posed these questions to Mr. Brady on June 8 and Mr. Brady said he would forward them to the appropriate staff members.

The group said they made three requests and Mr. Brady said he was obtaining documents through City Attorney Debbie Spinner and Finance Manager Bryan Raines. Mr. Phillis said after reviewing the documents, their questions are still unanswered.

"The important issue is that they are not answering standard questions," he said. "They are violating the city’s value standards of being open and honest to the public."

Not true, said City Manager Chris Brady. Mr. Brady said he offered the VBO volumes of documents, but also offered to meet with the group.

"First we asked them to be more specific because they never specified which bonds they were talking about. There are three different bond schedules," Mr. Brady said. "Their criticism is unfounded. We provided them every opportunity, from public documents to telling them to come and sit down with staff. It’s unfortunate and misleading they say we gave inadequate response."

Mr. Phillis said the upcoming bond election is an important issue and the public needs to be informed before casting their votes in November on whether the city should be authorized to issue more than $260 million in water, wastewater, electric and gas revenue bonds.

Mr. Brady agrees the bond election is an important issue because bonds are needed.

"Like every city, every four or five years when a city is growing we have to have one to replace infrastructure lines and water main breaks associated with older lines; for capital improvements," Mr. Brady said. "We’re trying to do it in a proactive way because an emergency basis is more costly to the city. As the city continues to grow, we need to be able to provide water and treat water properly."

Mr. Brady said the city issues bonds to pay for those capital projects. He said bonds are sold at a low interest rate — less than 5 percent — and the bonds are paid off over 15 years.

According to Mr. Phillis, the city has other options to selling the bonds. He cited more than $11 million revenue the city received from selling land in Pinal County, other city-owned land and various funds kept by the city, like rainy day and slush funds.

Mr. Phillis said the VBO opposes the bond election because funds will be used for something other than utilities, leaving the extra cost to taxpayers. He said if the reported $80 million was not taken annually from the utility fund and put into the general fund for random council use, it would take 3.25 years to pay for $260 million in repairs and maintenance, instead of 25 years at 10 percent interest.

However, Mr. Brady said the transfer from the utility fund to the city’s general fund is a common city practice and the transfer is not related to utility rate increases.

"They are totally unrelated issues. The city has been doing that for years and it is something the city has tried to keep level and not increase," Mr. Brady said.

Mr. Brady said without a property tax the fund transfers are important, though he also said utility rates would not increase to help the general fund, even indirectly.

According to Vicki Tinberg, administrative assistant for the city clerk, Mesa’s last utility bond election was March 9, 2004. Ms. Tinberg voters approved all bonds: for gas, 23,707 voted yes and 8,576 voted no; for water, 23,889 voted yes and 6,867 voted no; and for wastewater, 22,553 voted yes and 7,675 voted no.

Mr. Brady is confident the city will vote for the bonds, as they have in the past, to maintain the quality and condition of city utilities.

"They are so critical. If we don’t have those funds, you put in jeopardy your entire utility system," Mr. Brady said.

But Mr. Phillis does not believe this.

# # #

Comment:

Is the Mesa City Manager lying to the press? Is he trying to use the press to mislead the public? You decide.

First take a look at the section in the above article where Brady says the $260 million in utility revenue bonds will be sold "at a low interest rate - - less than 5 percent - - and the bonds are paid off over 15 years."

The problem is that at 10 percent over 25 years that $260 million face amount explodes to $900 million, whereas if you use what Brady told the press you cut that massive debt load in half -- still an excessive burden for bond debt that isn't needed in the first place. To see for yourself if Brady is telling the press the truth, go the the actual ballot language at

If the intent is to sell bonds that bear interest not exceeding 5% per annum, and pay principal over not more than 15 years, then why doesn't the ballot language say that? Why does the ballot language say 25 years at 10 percent? Is Brady trying to use the press? To minimize the cost? To influence the outcome of still another election?

And then there is this passage: "...Mr. Brady said the transfer from the utility fund to the city’s general fund is a common city practice and the transfer is not related to utility rate increases."

Oh really? According to press reports, that contradicts what other city officials have been saying since the rate increases were first challenged two years ago. For example, a June 24, 2006 article by Sarah Lynch in the East Valley Tribune carried this statement attributed to utilities manager David Plumb: "Because the city’s utilities are one of Mesa’s primary forms of revenue, rate increases are often used to plug budget gaps, Plumb said."

"They are totally unrelated issues," Brady told the Independent.

According to the paper, "Mr. Brady said without a property tax the fund transfers are important, though he also said utility rates would not increase to help the general fund, even indirectly."

Not even indirectly? That clearly contradicts what other officials have been telling the press. On June 24, 2006 The Republic's Justin Jouzapavicius wrote that city officials feared passage of the utility rate initiative, "could cripple Mesa's financial structure."

According to the Republic article, Bryan Raines, Mesa's financial services manager said Mesa "leans heavily on profits from its city-owned utility system."

So who is telling the truth here -- David Plumb and Bryan Raines? Or Chris Brady? And does it really matter?

Then there is the part where Brady says he "offered to meet with the group" over the VBO's 16 unanswered bond questions.

"Their criticism is unfounded." Brady glibly tells the Independent. "We provided them every opportunity, from public documents to telling them to come and sit down with staff. It’s unfortunate and misleading they say we gave inadequate response."

The primary mission of the VBO is to promote truth in government. That means we expect city officials to tell the truth.

Attached is the complete exchange between Brady and the VBO over the 16 bond questions from the first inquiry through July 16. There has been no face-to-face meeting with Chris Brady. No conversations. No phone calls. Do you see any offer in any of these emails "to meet with the group"? To "come and sit down with staff"?

There is a technically accurate term to describe Brady's on-the-record quote in the Independent. It's called lying. And if he is lies to the press, how can we believe anything he says?

Last week a city parks and recreation employee was fired for violating a city conduct code that prohibits employees from discrediting or embarrassing the city.

We think that discrediting or embarrassing the city includes lying to the press -- and getting caught at it. We think the code should apply to all city employees, including those at the top.

Fred Phillis