Southern Arizona News Examiner Endorsements

A quick shout out to our friends at the Southern Arizona News Examiner on their endorsements. Here’s the editorial they sent out earlier:

Southern Arizona News Examiner

ENDORSEMENTS FOR THE 2014 GENERAL ELECTION

ALL PARTISAN OFFICES – VOTE STRAIGHT REPUBLICAN 

I don’t care if there’s an unopposed Democrat running who’s your brother-in-law, DON’T VOTE FOR ANY OF THEM.

Not because all the Republicans are wonderful, they aren’t A few are even dingbats. But life is a matter of “compared to what” and the system works better when the party that needs reform is helped along.

Democrats need reform more desperately than Republicans. Republicans have primaries and allow their peasantry a voice. Democrats now are ruled by a small elite that is loyal to the special interest groups they comprise. Union leadership is now more involved in backing up the LGBTs over same sex restrooms than they are about taking care of their members. Teacher’s unions are more interested in backstopping the big corporations pimping Common Core and the massive test revenues they will get than they are about taking care of classroom teachers or, God forbid, the kids themselves.

Radio host Hugh Hewitt said it best. Democrats need to be punished for the cowardice they have displayed in failing to challenge Obama, Pelosi and Harry Reid for their incompetence and dumb ideas.

Make them pay for it. The humiliation of a big defeat might finally get them to change some of their elitist ways.

BALLOT PROPS – STATEWIDE 

122 – YES It drives the left nuts to consider something the Founders would find elementary.

303 – YES Only someone with the soul of a petty bureaucrat and a sick control freak would deny a terminal patient a shot at an experimental drug.

BALLOT PROPS – LOCAL

415 -YES We have the same obligation to discarded and sick pets that we have to discarded and sick children. Only anarcho-capitalists can vote no on this without hypocrisy. WAIT! Anarcho-capitalists don’t believe in voting. Conservatives and limited government conservatives should join me in voting YES for something that will save thousands of dogs, cats and assorted other critters. DO THE MATH YOU WHINING MAROONS WITH PIG MASKS. $22 million over 15 years for over a million people is chump change.

Get a life.

Net Metering Levels The Energy Playing Field

By Barry Goldwater Jr.

I don’t recall Joe Galli, the former executive director of the North Scottsdale Chamber of Commerce, ever taking up the cause of economically disadvantaged people in south Phoenix. Nor do I understand why he doesn’t identify his new role as the Executive Director of  Market Freedom Alliance. It’s perplexing that the head of an organization by that name would be expressing disapproval of free market enterprise. Nor do I understand Mr. Galli’s motives in writing an article critical of net metering. Perhaps APS has found another front group to attack solar energy.

I am Chairman of TUSK, which stands for Tell Utilities Solar won’t be Killed. It’s a conservative group that supports energy choice and energy independence.

APS doesn’t like net metering because it forces the utility monopoly to pay a fair price for the excess solar energy rooftop solar users send back to the grid. That’s not a subsidy, that’s commerce. In fact Arizona subsidies for rooftop solar power are long gone. That’s a good thing. The industry is able to stand on its own two feet.

You can’t say the same about APS. It’s a regulated monopoly that depends on a government set rate of return of 10%. If APS makes some bad calls, no worries, they can ask regulators for a rate hike. And captive ratepayers have no choice. It’s not like they can switch power companies. As far as national subsidies, the fossil fuel industry is one of the most heavily subsidized industries in the country, receiving far more than solar.

The rooftop solar industry, which supports TUSK, is made up of private businesses, not regulated monopolies. Rooftop solar is giving these monopolies the first competition they ever had and they don’t like it; and apparently neither does Mr. Galli.

Whatever Joe’s motives in writing an article critical of net metering, I’d like to set the record straight. The federal government has dozens of favorable tax structures that benefit traditional energy sources such as natural gas, coal and nuclear.  Yet for solar there is only one and the benefit of the lower tax treatment is passed on to the end consumer through lower electricity costs.  As any good republican knows, lower taxes means more economic growth and more jobs.  Lower taxes on solar are no different.

Secondly, Mr. Galli makes the claim that rooftop solar is for the rich. That’s simply not the case. 57% of the rooftop systems installed in Arizona are installed in zip codes where the median household income is at or below the Arizona median income. That’s according to the Arizona Solar Energy Industry Association, a respected trade group.

Monopolies such as APS don’t like leased rooftop solar which has made solar available to people of more modest means. In fact, APS supports a property tax that targets leased rooftop solar customers. Hopefully Mr. Galli’s concern for those struggling in this economy will extend to working class families and retirees using solar; and perhaps he will write an article critical of this impending property tax.

Conservatives are smart enough to know that net metering opens energy choice and energy independence to more people through rooftop solar. And I am certain that conservatives can see though APS’ attempts to tax a competitor out of business.

Sal DiCiccio: How You Got Duped

SalDiCiccio

Vote YES 487/Stop Pension Abuse 

How (fire/police death and disability claims) became the most important issue in the 487 campaign-and how it’s not true. 

I am writing to show you how you were manipulated by the politicians (mayor & council), the opponents of pension reform and by the media covering this important issue. And, mostly because you need this information before you vote.

The issue of death/disability benefits being cut off are just not true and the media knew this was not true when they wrote their stories.

Here is the technique used to dupe you:

History and Technique

During my re-election campaign the unions filed a lawsuit in court against me, they then got the Media to write about the lawsuit. The unions then did mailers and TV to the public on the their lawsuit using the articles in the newspaper as the foundation.  Yes, the unions file their own lawsuit, get the media to write about it, then use the stories written in the paper in mailers and on TV. Even though the judge quickly threw out the case, the stories were written and used as fact in subsequent mailers and on TV.

Fast forward to The Pension reform (487) campaign:

The unions get their friends on the council to change the wording on the ballot description to add the words “Police Officer and Firefighter,” they then create the death and disability connection, then they get the media to write about it and create a story, then they do mailers and TV based on the confusion that they created using the published stories as the foundation. The unions rig the ballot description, get the media to write about it, then use the stories written in the paper in mailers and TV. The media knew this was not true.

The media can claim ignorance the first time, but a second time?

Hats off to the anti-pension reform campaign for being able to successfully use the media to make an issue that was never an issue as the highlight of the campaign.  Unfortunately, it creates confusion and suppresses voter turnout. The unions want to make sure you don’t vote.

And the media? Well, the same people that complain about low turnout are the same ones who knowingly help write the stories depressing turnout.

Fact: Death/disability claims are a LIFE INSURANCE plan and not a pension.  They’re not even close to being part of this initiative. 487 covers only the City of Phoenix pension plan. The police/fire are covered by the state pension plan not by the city plan. Phoenix cannot opt out of that plan. Police and Fire are clearly excluded.

I thought long and hard whether to write this column, but I believe strongly every vote matters.  Any delay in getting out the reality behind the politics would be doing you and disservice. The only way we will win is if the public gets the truth, please pass this on to your email list!

I am sorry that was to done to you, but you are the last ray of hope if we are going to change and reform our pension system.  Our city needs your help and we need you to vote.  Please don’t let them win by not voting.

Vote YES 487

Sal DiCiccio: Pension Reform Matters – Vote YES on 487

MillionaireFirefighter

$1.1 Million: Cash Payout to one Firefighter at Retirement and then STARTED his annual Pension of $149,420-for life. He retired at 54.

$955,000: Cash Payout for another Firefighter. He then started a $130,000 pension for life. He retired at 53.

See the list of Firefighter retirees below:

Average Cash payouts at Retirement: $679,672

Average Yearly Pension: $111,296

Average Age at Retirement: 53

24 Firefighters cashed out over $16 million in retirement and then started their pensions.

Every single city employee (Everyone) gets both a Cash Payout AND a Pension.

Vote YES 487/Stop Pension Abuse

We all love our firefighters and respect them for the hard work they give our city. You’re probably wondering why they’re coming in droves to our neighborhoods handing out misleading information on pension reform? Especially since they’re clearly excluded from the pension reform proposal. Why, because they’re concerned that they may be next for reform.

The numbers from above are from Budget and Research and from the state of Arizona Retirement plan (PSPRS).

Why does pension reform matter? Without reform you will see more:

New and higher taxes: Phoenix passed a new water tax on you to pay for  pension spiking.

Cuts in Service: Phoenix is short over 500 police, cuts were made to seniors, libraries, seniors and children.

The government unions are doing all they can to undermine your vote. They want to keep everything…the way it is. Their union and their spokesman are purposely using strong arm tactics to attack people who support pension reform.

Here are the numbers:

PensionNumbers

What does 487 do?

* It immediately stops pension spiking. This alone would save over $19 million per year
* Fixes the broken pension system saving over $400 million.
* Allows current employees to keep everything they have earned.
* Makes new employees get the same retirement benefits you get. Moving all newemployees to a 401(K).
*Police and Fire are clearly excluded from the proposal.

Vote YES 487

Yes487

My best to you and your family,

Sal DiCiccio
Phoenix City Councilman

Terry Goddard Misrepresents Facts – Secretary Bennett Sets Record Straight

Secretary of State addresses the absurd claims by perennial candidate Terry Goddard.

PHOENIX – Candidates often make inflammatory statements as a tactic to provoke a sense of mistreatment to curry favor with voters.  However, blatant mischaracterizations about Arizona’s system of elections must be corrected.  With less than three weeks before the General Election, current Secretary of State Ken Bennett believes it’s necessary to clear up inaccurate information being presented by Terry Goddard over the past few months.

The latest examples occurred during the Clean Elections Debate, hosted by Arizona PBS.  During the broadcast, Mr. Goddard made two statements that were either terribly ignorant or deliberate misrepresentations of the truth for political gain.

“I’m confused where Mr. Goddard came up with amount of $2 million to implement the so-called Dual Track, or bifurcated system of voting in the primary,” said Secretary Bennett.  Truth is, our counties will spend about $500,000 for both the primary and general elections.  This system—one that I’ve repeatedly said is not ideal for election officials—was developed in response to two conflicting directives.  One from Arizona’s voters, (Prop. 200) and the U.S. Supreme Court (Arizona v. Inter Tribal Council of Ariz., Inc.)  As I’ve publically said before, and I’ll ask Mr. Goddard, which directive should we ignore; Arizona’s voters or the Supreme Court?

“In addition, I’m troubled by Mr. Goddard’s characterization that students, ‘who have to vote a federal ballot, are treated as second class citizens,’ which is patently false and simply absurd.  College students do not have to vote a federal form.  Those voting a federal ballot are simply doing so because they haven’t provided proof-of-citizenship to our County Recorders, a requirement approved by voters in 2004.  Election officials around the state are committed to treating each voter equally and for Mr. Goddard to assume otherwise is offensive to elections officials statewide.

“Combined with his conspiratorial accusation of voter suppression when he declared ‘independent voters get only one chance to cast a ballot,’ I question Mr. Goddard’s fundamental understanding of how elections work in Arizona. While I certainly appreciate Mr. Goddard’s compliment about my singing voice during the debate, I would ask he either learn the songs or stop making up the lyrics.”

Net Metering Tax Credits Discriminate

Recent legislation providing solar tax credits for residential homeowners has allowed billionaires, corporations, and Wall Street financiers to profit at the expense of working class Americans.  Solar corporations leasing panels to home owners, rather than selling, have reaped the financial benefit of solar tax credits intended for home owners to the tune of hundreds of millions.  These tax credits to solar companies have boosted dividends for their shareholders at taxpayers’ expense, while panel-leasing home owners get no immediate financial benefit.

meterWorse.  Solar tax credits discriminate against lower income communities.  Group housing, where many lower income families reside, cannot install residential solar panels, and are therefore not eligible from the get-go for these special tax credits.

Arizona is subsidizing the solar industry with $1.2 billion on residential solar, and not a dime goes to the state’s lowest income sectors – yet, another reason not to have discriminatory solar tax credits.

Further, after residential panels are installed at huge costs to taxpayers, the system of net metering goes to work, also discriminating against the working class.  Owners of solar panels can buy power from the grid as needed, or ship surplus power back to the grid when they produce more than they use.  Under net metering, solar panel owners, however, avoid paying for the service and repairs to maintain the grid.  These costs to maintain the grid are then shifted to non-solar users, placing a higher financial burden on this group, resulting in a disproportionate share of the burden falling on the aforementioned lower income sectors.

In Arizona, taxpayer subsidized solar panel ownership has led to the adding of “environmental programs cost adjustment factor” and renewable energy fees on utility bills, raising financial burdens for all non-solar users, lower income families included.  For example, the city of Scottsdale has a median family income of over $92,000.  Just in the past 5 years, they have had over 1,200 solar installations, which are eligible for state and federal subsidies.  In contrast, an area in south Phoenix with 29,000 residents and an average income of $41,000 has only 45 residential solar installations.  This is just an example, but the statistics are undeniable:  Taxpayer subsidies go to wealthier communities by a factor of 26 times more than lower income communities.

Regressive solar tax credits should end immediately.  Why have we chosen one industry over another?  And worse, we’ve chosen a discriminatory industry that keeps lower income communities down by unfairly forcing them to pay for others solar installation and operation.  Under any sun, these policies are just plain wrong.

Joe Galli

Former Executive Director – North Scottsdale Chamber of Commerce

Prop 480: A Billion Dollar Boondoggle

A $1.4 BILLION property tax increase. That is the one thing the proponents of Proposition 480 keep leaving off their talking points. Proposition 480 is a $1.4 Billion property tax increase to pay for a brand, spanking new Government County Hospital.

Keep in mind we already spent millions for hospitals expanding Medicaid and we haven’t even seen how much the increased revenue has been to the County Hospital yet. Plus, keep in mind you are already being taxed on your property tax bill for the County Hospital to the tune of $60 million a year. How much is enough for more government health care?

Clearly, the County Hospital wants to compete with the private sector hospitals which was not its original mission. In fact, it was to serve those that cannot be served by the private hospitals. So, let me get this right, they now want to use $1.4 billion of new tax money to compete with the private sector to provide EVEN MORE government healthcare. Who thinks that is a good idea?

Well, you won’t be surprised to learn that the same forces that rammed Medicaid expansion through the legislature are at it again. Insider, political operative, Chuck Coughlin is the head cheerleader for proposition 480 and he has put together a “who’s who” list of tax increase supporters like Ed Pastor, Mary Rose “Never met a tax I didn’t like” Wilcox, Rodney Glassman from (we can’t tax you enough, Pima County), and Michael “we need a bigger tax for light rail” Johnson. What’s $1.4 Billion to them, right?

And doesn’t anyone find it slightly curious that they are actually spending all this money to provide LESS beds? That’s right. We are spending over a BILLION dollars to make a SMALLER hospital with less beds. Only government works this effectively to produce less with more.

Don’t let this proposition sneak by because nobody knew it was over a BILLION dollars. E-mail your friends and neighbors to check out the website at www.votenoon480.com and urge them to vote NO on Proportion 480 so all of us can avoid the 3rd largest tax increase in Arizona history, paid for by the citizens of only one county!

Fred DuVal Aided the Clintons in Granting Clemency to Convicted FALN Terrorists

By Joseph F. Connor

Of all the malfeasant scandals the Clintons have committed, from lying under oath, to Whitewater to the Marc Rich pardon, little compares to the politically craven 1999 clemencies to 16 unrepentant terrorists of the Puerto Rican terrorist group FALN (Armed Forces for National Liberation).   Fred DuVal was the co-chair of President Clinton’s White House Interagency Group of Puerto Rico, one of the groups that actively promoted clemency for terrorists.

From 1974 to 1983, the FALN waged a merciless, bloody war against the United States, attacking civilians mainly in Chicago and New York. On January 24, 1975, the FALN’s most deadly attack, the infamous lunchtime bombing of Fraunces Tavern, a New York City landmark, killed my father, Frank Connor, 33, and three other innocent men. It was supposed to be the day we would celebrate my brother’s 11th birthday, and my 9th.

An FALN communique of that day took credit for the attack, which it called a blow against “reactionary corporate executives.” In fact, my dad was born to immigrants and raised in working-class Washington Heights in northern Manhattan, not far from several of the FALN terrorists themselves.

The FALN continued its reign of terror until the early 1980s, when 11 of its members were arrested, tried and convicted of (among other serious felonies) weapons possession and seditious conspiracy. The entirely appropriate prison terms were to run from 55 to 70 years.  During their Chicago trials, these defendants rejected US jurisdiction, claiming to be prisoners of war. Several FALN members threatened to kill or maim the judge, Thomas McMillan.

However, on August 11, 1999, President Clinton, (almost certainly in an attempt to gain favor with New York’s Latino community for Hillary Clinton’s 2000 NY senate run) offered 16 FALN members executive clemency.  The FALN terrorists did not even request their own clemency.  Freedom was engineered on their behalf by none other than then Deputy Attorney General Eric Holder with the help of DuVal’s interagency group. Disgracefully terror supporters were provided a reported nine meetings with the Justice Department while victims and families like ours were ignored.  We only found out about the clemencies after they had been offered. If the unrepentant terrorists weren’t granted a month to decide to accept their freedom, they would have been released before families even knew of the offers.

Tellingly, one of the terrorists, Oscar Lopez Rivera, whose release DuVal’s office championed, was so committed to his comrades and cause that he outright refused clemency and remains in prison today.

DuVal and terrorist supporters may recite the line that these terrorists were not accused of killing or harming anyone.  In fact, they were convicted of willfully and knowingly joining a conspiracy to commit various acts of violence, including 28 Chicago-area bombings that maimed several people.

Further, all evidence indicates that those convicted in Chicago were part of the same national conspiracy that killed five people in New York, including the Fraunces murders and the New Year’s Eve 1982 attacks on Police Headquarters that left three NYPD detectives permanently injured.

The most vital role of government is to protect its citizenry.  As I said when testifying at Eric Holder’s AG confirmation in hearing in 2009, by releasing terrorists Holder (and by extension, DuVal) was playing Russian roulette with the American people.  Arizonans saw the results of that again through Operation Fast and Furious and the death of Border Agent Brian Terry.

Does Arizona want a governor who has already put cheap politics ahead of the safety of the citizens he is sworn to protect?   I think not.

Joseph Connor works in the financial services industry.  He testified at Eric Holder’s 2009 Senate AG Confirmation Hearing and is co-author of “The New Founders,” a novel bringing the American founders alive in the 21st Century.

H/T to Western Free Press.

Democrats prepare for damage control over Obamacare premiums

Interesting article recently in Politico that details how Democrats are preparing their talking points on the premium shock about to hit the healthcare market – right before the mid-term elections.

It will be interesting to see how this plays out in Arizona’s 1st, 2nd and 9th congressional districts where Democrats are seated and being challenged by Republican challengers. (My prediction is Tobin, McSally and Rogers will win Tuesday.)

Here’s the article written by Edward-Isaac Dovere.

Obamacare’s next threat: A September surprise

Obamacare open enrollment closed March 31. The White House’s Obamacare war room did not.

Most state health insurance rates for 2015 are scheduled to be approved by early fall, and most are likely to rise, timing that couldn’t be worse for Democrats already on defense in the midterms.

The White House and its allies know they’ve been beaten in every previous round of Obamacare messaging, never more devastatingly than in 2010. And they know the results this November could hinge in large part on whether that happens again.

So they’re trying to avoid — or at least, get ahead of — any September surprise.

Aware that state insurance rate hikes could give Republicans a chance to resurrect Obamacare as a political liability just weeks before the midterms, the White House’s internal health care enrollment outreach apparatus immediately redirected into a rapid-response, blocking-and-tackling research and press operation geared toward preempting GOP attacks on the issue.

In what aides say is a sign of a changed approach within the White House — but also heightened concerns around the midterms — they’re even coordinating with Hill Democrats, funneling localized background analysis and talking points to each state’s delegation through Senate Majority Leader Harry Reid (D-Nev.), House Minority Leader Nancy Pelosi (D-Calif.) and New York Sen. Chuck Schumer’s Senate Democratic Policy and Communications Committee. They’ve also relied on California Rep. Henry Waxman’s staff at the Energy and Commerce Committee to produce rebuttal reports, often in advance, on GOP claims about insurance.

“One of the lessons we’ve learned in implementing health care is to stay on it,” said Tara McGuinness, the White House senior communications adviser who has been spearheading the effort for the West Wing, reflecting on previous run-ins. “We are not going to let anyone distort the debate.”

(continue reading)

Mesa’s Debt Bomb, thanks to former Mayor Scott Smith

By Gene Dufoe

This brief study of the City of Mesa FY2014/15 Budget has been compiled by Mesa resident Gene Dufoe. Mr. Dufoe is a retired Boeing engineer/manager who possesses the following degrees: BSAE, MSAE, and an MBA with an emphasis in Finance. He is a Precinct Committeeman in LD25. Dufoe supports Danny Ray for Mayor of Mesa, Dr. Ralph Heap for the LD25 Senate seat presently held by Bob Worsley, and Diane Douglas for Arizona Superintendent of Public Instruction.

Note:  There are four utility system revenue bond authorization questions on the November 2014 ballot, one each for Water, Wastewater, Natural Gas, and Electric.  Total will be $580,000,000.  See the City Council Resolution

LOOKING AT THE CITY OF MESA BUDGET FOR THIS FISCAL YEAR 2014-2015

Normally, the City of Mesa publicizes only the millions of dollars of Total General Obligation Bonds, Total Utility Systems Revenue Bonds, Total Street and Highway User Revenue Bonds, and Total Excise Tax Obligations outstanding, not the total bonds obligation or the interest obligation.  However, both need to be exposed.  The City of Mesa Total Bonds outstanding is $1,710,800,001 for FY2013/2014 vs. $1,220,778,673 for FY2008/09.

The scheduled interest to be paid through 2037/38 is $302,539,619 for only the General Obligation Bonds issued during Scott Smith’s administration.  This is nearly three times greater than was paid on the General Obligation Bonds issued under the previous administrations.  The comparison of the Utility Revenue Bonds is even worse, $71,360,274 vs. $327,537,942, or 4.6 times greater.

During Mayor Hawker’s service from 2000 to 2008, several bond issues were refinanced from earlier administrations, and the total interest paid was only a fraction of the repaid principal.  However, the financial situation of Mayor Smith’s term of office from 2008 to his recent resignation in June, 2014, has placed the City of Mesa in worsening financial terms for the future.

Without considering the interest on the General Obligation Bonds, Utility Revenue Bonds, Street & Highway User Revenue Bonds, and Excise Tax Obligations, nearly $500,000,000 of additional bonds have been approved during Mayor Smith’s period of service.  Interest on the General Obligation and Utility Revenue Bonds will add $630,000,000 through 2037-38, totaling more than $1.1 BILLION additional debt added during Mayor Smith’s time in office.  The interest on the $114,650,000 Street and Highway User Bonds and the $216,115,000 Total Excise Tax Obligations outstanding in FY2013-14 will add to the $630,000,000 interest total; however, the exact amounts were not readily available.

In addition to those bonds outstanding (and the bonds which have been authorized, but not yet sold), the Proposed Five-Year Capital Improvement Program has $680,392,701 which needs future authorization.  These proposed bonds, needing future authorization, will likely be voted on in the next 3-4 years.  Per the FY2014/15 Final Budget Summary, the City is not obligated to a project by inclusion within the CIP.  Each project is considered individually by the City Council during the year.

The reason that the interest scheduled was so much higher during Mayor Smith’s years in office is that both the length of the bonds were extended, and the payment of principal was also substantially delayed until the last years of the bond life.  For example, under the previous mayor, $11,705,000 2005 General Obligation Bond life was 18 years and the total interest scheduled was $4,128,700 or Total Interest Paid/Principal Repaid = 36.9%.

However, under Mayor Smith, the $30,865,000 2010 General Obligation bond life was 20 years, the total interest scheduled to be paid is $26,416,950 and Total Interest Paid/Principal Repaid = 85.59%.  The reason was no principal was scheduled for the first 9 years, principal payments of $1,115,000 to $2,500,000 were scheduled for the tenth to the nineteenth years, and in the twentieth year, the principal payment of $13,225,000 was scheduled.  The Total Interest Paid/Principal Repaid = 85.6%.

However, that is NOT the worst.  The Utility Revenue Bonds which are paid by the City of Mesa residents through the Secondary Property Tax and the monthly utility bills are managed by the City of Mesa’s business portion, called Enterprise Fund.  The Enterprise Fund transferred $173,606,136 to other current obligations of the city, per the City of Mesa Summary of Estimated Revenues and Expenditures, FY2014/15.

For the $50,380,000 2010 Utility Systems Revenue Bonds, the City of Mesa has scheduled interest payments of $3,073,280 annually for 24 years with no principal payments for the first 23 years with the entire principal scheduled $50,380,000 for the 24th year.  The total interest scheduled is $73,380,000.  The ratio of Total Interest Paid/Principal repaid = 134.2%.

Slightly less bad for the taxpayers are the $36,385,000 2014 Utility Systems Revenue bonds in which the City of Mesa has scheduled estimated interest payments of $1,819,250 annually for the first 23 years with no principal payments for the first 22 years; principal payments of $20,000,000 in the 23rd year and scheduled interest payment of $829,250 and principal payment of $16,385,000 in the 24th year.  Total interest $42,620,000.  The ratio of Total Interest Paid/Principal repaid = 117.43%.

If the voters do not approve the State Imposed Expenditure Limitation Home Rule Continuation, then the City of Mesa will need to eliminate $184 million from the budget, starting with FY2015-16.  The one-time override alternative allows for exceeding the state imposed expenditure limitation for one fiscal year.  If the State Auditor General determines a city has exceeded the expenditure limitation, a portion of its share of the state income tax allocation is withheld.   The penalty is assessed as follows:

Exceeding by less than 5% – penalty will equal to amount of the excess.

Exceeding by more than 5%, but less than 10% – penalty will be three times the excess.

Exceeding by more than 10% – penalty will be five times the excess or 1/3 of the state income tax allocation, whichever is less.  If the State limitation has been exceeded by more than 10%, the expected penalty to apply to FY2014/15 would be $17.7M (based on one-third of the FY2014/15 state-shared revenue).

The FY2014/15 budget does not allow the City to address the backlog of needs considered to be lifecycle or infrastructure replacements.

The contributions to the vehicle replacement fund do not address the full annual need nor do they allow for a reserve balance to mitigate future years where needs may spike.

The aging of buildings, technology, equipment, etc., requires scheduled upgrades/replacement.

A special commission of private-sector, public-sector, and retired personnel should be formed to make recommendations to the Mayor and the City Council for actions to be taken.  It is time for the City of Mesa to cut all but the absolutely essential services and reduce the city payroll, plus have active and retired city employees pay a larger portion of their medical, dental, and vision expenses.  By contrast, most private business employees pay a high percentage of medical, dental, and vision expenses; retirees have paid for their entire medical, dental, and vision expenses for many years.  Recommendations for the Arizona State Retirement System, Public Safety Personnel Retirement System, and Elected Officials Retirement Plan should also be considered.  Privatization of some or all of the services provided by the Enterprise Fund should be part of any such study.

References

  1. City of Mesa Executive Budget Plan 2014/15 & FY2014/15 Community Report Average Homeowner’s Cost Comparison
  2. Secondary Property Tax – Resolution No. 10478
  3. FY2014/15 Legal Budget – Resolution No. 10473
  4. FY2014/15 Capital Improvement Program – Resolution No. 10472
  5. FY2014/15 Final Budget City Council Report
  6. FY2014/15 Final Budget Summary
  7. FY2014/15 Home Rule – State Imposed Expenditure Limitation – Home Rule Continuation Presentation
  8. FY2008/09 Community Report Average Homeowner’s Annual Cost Comparison
  9. FY2008/09 Tentative Five-Year Capital Improvement Program
  10. FY2008/09 Final Budget City Council Report
  11. Pledged Debt Analysis For Continuation of Impact Fees City of Mesa, Arizona, prepared by Duncan Associates, April 16, 2013
  12. Preliminary Official Statement dated May 15, 2014; $37,550,000 City of Mesa, Arizona, General Obligation Bonds Series 2014, APPENDIX B
See Also Questions from Mr. Dufoe and answers from Ryan Wimmer, Mesa’s Office of Management and Budget:

1.  General Obligation Bonds (refunding) What was the bond rating for the City of Mesa GO refunding bonds over the past six years?  When are the annual bond principal installments being redeemed and at what interest rate?

Series

2002       OS: http://emma.msrb.org/MS191242-MS166550-MD322389.pdf (see page 13 for ratings and the cover page for principal maturity and interest rates)

2004       OS: http://emma.msrb.org/MS217101-MS192409-MD373504.pdf (see page 14 for ratings and the second cover page for principal maturity and interest rates)

2006       OS: http://emma.msrb.org/MS52419-MS223977-MS616035.pdf (see page 13 for ratings and the second cover page for principal maturity and interest rates)

2012       OS: http://emma.msrb.org/EP609526-EP476667-EP877042.pdf (see page 11 for ratings and the cover page for principal maturity and interest rates)

2013       OS: http://emma.msrb.org/EA522649-EA407230-EA804180.pdf (see page 11 for ratings and the cover page for principal maturity and interest rates)

2.  The General Obligation bonds (Various Purpose) are as follows:

What was the bond rating for the City of Mesa Bonds – Various Purpose bonds when issued?  When are the bond annual bond principal installments being redeemed and at what interest rate?

2005       OS: http://emma.msrb.org/MS236093-MS211401-MD411149.pdf (see page 12 for ratings and the cover page for principal maturity and interest rates)

2006       OS: http://emma.msrb.org/MS52250-MS223608-MS615968.pdf (see page 12 for ratings and the cover page for principal maturity and interest rates)

2007       OS: http://emma.msrb.org/MS259729-MS235037-MD458462.pdf (see page 12 for ratings and the cover page for principal maturity and interest rates)

2008       OS: http://emma.msrb.org/MS270908-MS267339-MD528351.pdf (see page 11 for ratings and the cover page for principal maturity and interest rates)

2009       OS: http://emma.msrb.org/MS281039-MS280291-MD568491.pdf (see page 10 for ratings and the cover page for principal maturity and interest rates)

2010       OS: http://emma.msrb.org/EP431918-EP339205-EP735523.pdf (see page 10 for ratings and the cover page for principal maturity and interest rates)

2011       OS: http://emma.msrb.org/ER460776-ER359128-ER755820.pdf (see page 8 for ratings and the cover page for principal maturity and interest rates)

2012       OS: http://emma.msrb.org/EP644009-EP503264-EP904180.pdf (see page 10 for ratings and the cover page for principal maturity and interest rates)

2013       OS: http://emma.msrb.org/ER666235-ER517392-ER919995.pdf (see page 8 for ratings and the cover page for principal maturity and interest rates).

3.  Utility Systems Revenue Bonds (refunding) What was the bond rating for the City of Mesa Utility refunding bonds over the past six years?  When are the annual bond principal installments being redeemed and at what interest rate?

2002       OS: http://emma.msrb.org/MS188305-MS163613-MD316547.pdf (see page 13 for ratings and the cover page for principal maturity and interest rates)

2002A    OS: http://emma.msrb.org/MS197504-MS172812-MD334877.pdf (see page 14 for ratings and the cover page for principal maturity and interest rates)

2004       OS: http://emma.msrb.org/MS217102-MS192410-MD373506.pdf (see page 12 for ratings and the cover page for principal maturity and interest rates)

2006 (both issues)  OS: http://emma.msrb.org/MS52416-MS223973-MS616031.pdf (see page 12 for ratings and the cover page for principal maturity and interest rates)

OS: http://emma.msrb.org/MS254547-MS229855-MD448008.pdf (see page 13 for ratings and the second cover page for principal maturity and interest rates)

2008       OS: http://emma.msrb.org/MS270955-MS267402-MD528506.pdf (see page 11 for ratings and the cover page for principal maturity and interest rates)

2012       OS: http://emma.msrb.org/EP608885-EP476146-EP876514.pdf (see page 10 for ratings and the second cover page for principal maturity and interest rates)

2012 Taxable Refunding.  OS: http://emma.msrb.org/EP615721-EP481744-EP882241.pdf (see page 11 for ratings and the second cover page for principal maturity and interest rates).

4.  Utility Systems Revenue Bonds (Utility Improvement) What was the bond rating for the City of Mesa Utility Improvement bonds when issued?  When are the bond annual bond principal installments being redeemed and at what interest rate?

2002       OS: http://emma.msrb.org/MS188116-MS163424-MD316173.pdf (see page 12 for ratings and the cover page for principal maturity and interest rates)

2003       OS: http://emma.msrb.org/MS203914-MS179222-MD347345.pdf (see page 12 for ratings and the cover page for principal maturity and interest rates)

2004       OS: http://emma.msrb.org/MS222295-MS197603-MD383623.pdf (see page 10 for ratings and the cover page for principal maturity and interest rates)

2005       OS: http://emma.msrb.org/MS235923-MS211231-MD410807.pdf (see page 10 for ratings and the cover page for principal maturity and interest rates)

2006       OS: http://emma.msrb.org/MS52220-MS223454-MS615938.pdf (see page 11 for ratings and the cover page for principal maturity and interest rates)

2007       OS: http://emma.msrb.org/MS259549-MS234857-MD458102.pdf (see page 10 for ratings and the cover page for principal maturity and interest rates)

2008       OS: http://emma.msrb.org/MS270681-MS267070-MD527833.pdf (see page 10 for ratings and the cover page for principal maturity and interest rates)

2009       OS: http://emma.msrb.org/MS281167-MS280466-MD568877.pdf (see page 9 for ratings and the cover page for principal maturity and interest rates)

2009 WIFA Loans – WIFA loans are not rated by the rating agencies.  Redemption schedules are attached.   (See 2009 WIFA loans.)

2010       OS: http://emma.msrb.org/EP431713-EP339023-EP735345.pdf (see page 11 for ratings and the cover page for principal maturity and interest rates)

2012       OS: http://emma.msrb.org/EP643903-EP503173-EP904086.pdf (see page 10 for ratings and the second cover page for principal maturity and interest rates)

2013       OS: http://emma.msrb.org/ER666086-ER517255-ER919851.pdf (see page 10 for ratings and the cover page for principal maturity and interest rates)

2014       OS: http://emma.msrb.org/EP820778-EP635288-EP1036999.pdf (see page 10 for ratings and the cover page for principal maturity and interest rates).

5.  Street and Highway User Revenue Bonds (refunding) What was the bond rating for the City of Mesa Street and Highway User Revenue Refunding Bonds over the past six years?  When is the annual bond principal installments being redeemed and at what interest rate?

2004       OS: http://emma.msrb.org/MS217103-MS192411-MD373508.pdf (see page 14 for ratings and the cover page for principal maturity and interest rates)

2005       OS: http://emma.msrb.org/MS230312-MS205620-MD399580.pdf (see page 11 for ratings and the cover page for principal maturity and interest rates)

2012       OS: http://emma.msrb.org/EP608850-EP476109-EP876480.pdf (see page 11 for ratings and the cover page for principal maturity and interest rates)

2013       OS: http://emma.msrb.org/EP759947-EP589453-EP990970.pdf (see page 10 for ratings and the cover page for principal maturity and interest rates).

6.  Street and Highway User Revenue Bonds (Street Improvement) What was the bond rating for the City of Mesa Street Improvement bonds when issued?  When is the annual bond principal installments being redeemed and at what interest rate?

2003       OS: http://emma.msrb.org/MS203840-MS179148-MD347197.pdf (see page 13 for ratings and the cover page for principal maturity and interest rates)

2004       OS: http://emma.msrb.org/MS222376-MS197684-MD383785.pdf (see page 11 for ratings and the cover page for principal maturity and interest rates)

2005       OS: http://emma.msrb.org/MS236032-MS211340-MD411027.pdf (see page 10 for ratings and the cover page for principal maturity and interest rates)

2006       OS: http://emma.msrb.org/MS52253-MS223605-MS615966.pdf (see page 10 for ratings and the cover page for principal maturity and interest rates)

2007       OS: http://emma.msrb.org/MS259518-MS234826-MD458040.pdf (see page 11 for ratings and the cover page for principal maturity and interest rates).

7.  Excise Tax Obligations Outstanding

Were the 2010 Highway Project Advancement Notes redeemed at the July 1, 2014, optional redemption date at par? Yes.

What was the bond rating for the 2010 and 2011A City of Mesa Highway Project Advancement Notes since they were issued?

2010 – OS: http://emma.msrb.org/EP430767-EP338370-EP734691.pdf (see page 10)

2011A – OS: http://emma.msrb.org/EP571936-EP448917-EP848828.pdf (see page 14).

What was the bond rating for the Phoenix-Mesa Gateway Airport Authority obligations when they were issued?

OS: http://emma.msrb.org/ER583308-ER453122-ER855821.pdf (see page 15)

What is the rating, purpose, refunding, and interest rate paid on the Excise Tax Revenue Obligations issued in 2013?

OS: http://emma.msrb.org/EP751300-EP583298-EP984886.pdf (see page 13 for ratings, the second cover page for interest rates, and “Optional Redemption” on pages 2 and 3 for refunding provisions)

Regarding the purpose, from the cover page:

The City of Mesa, Arizona (the “City”) Excise Tax Revenue Obligations, Series 2013 (the “Obligations”) will be executed and delivered in the principal amount of $94,060,000 for the purpose of providing funds to (i) acquire and construct the Project (as defined herein) and (ii) pay costs of execution and delivery of the Obligations.

See “The Obligations” on page 2 and “The Project” on page 4.

8.  Have any of the overlapping jurisdictions informed the City of Mesa that they were in danger of not meeting their bonded debt obligations under the “Direct and Overlapping General Obligation Bonded Debt Outstanding” category? No.

9.  What is the schedule of planned sales of any authorized, but not issued, City of Mesa General Obligation bonds, Utility System Revenue bonds, Street and Highway User Revenue bonds or Excise Tax Obligations notes since 2013?

General Obligation and Utility System forecasted issuances are attached.  (SeeAuthorized Bonds – Issuance Forecast.)  There are currently no plans to issue Street and Highway User Revenue or Excise Tax bonds.

Have there been any additional refunding issues replacing series issues since 2013? No.

10.  Are there be any City of Mesa General Obligation Bonds issues, Utility System Revenue Bonds issues, Street and Highway User Revenue Bonds issues or Excise Tax Obligation notes to be submitted to the voters on the November, 2014 ballot?

There are four utility system revenue bond authorization questions on the November 2014 ballot, one each for Water, Wastewater, Natural Gas, and Electric.  See the City Council resolution at: http://mesa.legistar.com/LegislationDetail.aspx?ID=1821143&GUID=DB2A249F-5A7B-459F-A506-2A6379B8B9EC.