College bonds rich in clout

Health care, construction firms back MCCD measure
The Arizona Republic
Monday, October 4, 2004
Jason Emerson

Health care companies and firms related to the construction industry have contributed nearly $160,000 to a campaign aimed at passing a nearly $1 billion community college bond measure Nov. 2. The figure is nearly half of the money collected so far.

Bond money from Proposition 401 would pay for among other things construction of a nursing and biomedical facility, a health care training center, more than a million square feet of classroom and lab space, and building refurbishment at 10 colleges.

Citizens for the Maricopa Community Colleges is trying to raise more than $1 million to reach voters, according to donors. Campaign reports show the group collected $336,488 as of Aug. 26. That total is expected to increase dramatically by Thursday, when campaigns must report new contributions. Donations of more than $1,000 came from health care companies, 12 construction firms, architect and design firms, pipe fitters, telecommunications companies, consulting firms, and 16 individuals.

Nearly 100 individuals made smaller contributions. Overall, nearly 60 firms have donated money.

The campaign is heavy with support and financial clout, boasting the endorsements of CEOs, politicians and professional sports figures.

The Arizona Tax Research Association is opposing the bond issue. The nonprofit agency lacks the campaign’s budget and celebrity power, but holds sway as a respected public watchdog on government taxing. It fought bond proposals by the community college district in 1992 and 1994. The district lost in 1992, but won two years later.

Bonds shouldn’t pay for computers because they become obsolete quickly, or for maintenance and repairs because they are recurring expenses, said Michael Hunter, vice president of the association. Bonds are usually issued for 10 to 20 years, and taxpayers would be paying on them long after the computers would be replaced or the parking lots would need repaving, he said.

Lionel Diaz, an executive assistant to the Maricopa Community College District chancellor, said the district plans to pay off bonds used for computers in three to seven years, well within their life span.

He pointed out that the district isn’t doing anything wrong — schools often use bonds for technology.

Paying off the bonds used for technology in three to seven years means delaying payments on bonds used for construction, Hunter countered. Overall, the debt structure looks the same if both bonds were treated the same, he said.

Dennis Mattheisen, director of the finance audit section of the Arizona Auditor General’s Office, said Hunter and Diaz are both right.

It may not be possible for schools or other local government agencies to afford to keep up with technology without bonds, he said, adding that it’s routinely done.

But, the opposing association is arguing a sound policy because the life span of most technology will end long before the bonds are retired, he said.

"The question is a very difficult one to answer," he said.

If voters reject the bonds, it would jeopardize the community college district’s ability to expand, maintain low tuition, stay abreast with technology, and train students for the work force, according to Citizens for the Maricopa Community Colleges.

The district says there isn’t enough money in its budget for these projects, and fears it will run out of space soon if student populations continue to grow.

"This will change everything for anyone who has kids or grandkids," said Liana Harrison of Core Construction Services of Phoenix, a campaign contributor. Last month, the company took in nearly $33,000 at a campaign fundraiser featuring Arizona Diamondbacks player Luis Gonzales as the speaker.

The district is proposing to use $951 million in general obligation bonds to build 1.6 million square feet of new space at 10 campuses in Maricopa County, buy land in the downtowns of Phoenix and Mesa for new campuses, replace obsolete technology, remodel buildings, and repair equipment and infrastructure. Generally, the breakdown would be $550 million for construction projects, $300 million for computer and technology equipment, and $67 million for reroofing, repaving parking lots and other maintenance projects.

The bonds would be repaid by a property tax increase in less than 20 years at a total cost of nearly $1.4 billion in principal and interest. Homes valued at $100,000 would see an average property tax increase of $15.83 per year.

The campaign chairman is Steven Chanen, president of Chanen Construction Co. of Phoenix. Neither he nor Jessica Florez, the campaign manager and a former Phoenix city councilwoman, could be reached. Jay Thorne, a political consultant who is the campaign’s spokesman, didn’t return calls.

Largest contributions from companies

Blue Cross/Blue Shield of Arizona: $50,000 Wells Fargo: $35,000 Wal-Mart: $25,000 DMB Associates: $15,000 RBC Dain Rauscher: $15,000 Cox Communications: $10,000 Follett Higher Eduction Group:$10,000 Banner Health: $10,000 Arizona Hospital & Health Care Associates: $10,000 Sundt Construction: $10,000 Gould Evans Associates: $10,000

Largest contributions from individuals

Rufus Glasper, chancellor of Maricopa Community College District: $5,000 Corina Gardea, president of Phoenix College: $4,000 Debra Thompson, district vice chancellor: $3,000 Eugene Giovannini, president of Gateway Community College: $2,211.33 Romano Romani, president, Parry, Romani, DeConcini & Symms: $2,000 Ronald Bleed, district vice chancellor: $1,500 James Rock, vice president, Parry, Romani, DeConcini & Symms: $1,000 Former U.S. Sen. Dennis DeConcini, partner, Parry, Romani, DeConcini & Symms: $1,000 Steven Helfgot, district vice chancellor: $1,000 Maria Hesse, president of Chandler-Gilbert Community College: $1,000 Source: Tribune research