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Transcripts

September 24, 2003

Host: Michael Grant
Topics:
· Jim Irvin's resignation from Arizona Corporation Commission;
· Regional transportation plan
In-Studio Guests:
Howie Fischer, Chief Correspondent, "Capitol Media Services;
Neil Giuliano, chair of MAG's (Maricopa Association of Governments) Transportation Policy Committee and Mayor of Tempe;
State representative Gary Pierce, the Chairman of the House Transportation Committee;
Marty Schultz, Vice President of Government Affairs for Pinnacle West and a member of the Transportation Policy Committee

>> Michael: Tonight on "Horizon," Jim Irvin steps down from his post on the Arizona Corporation Commission. He says he will sue the state for his legal costs and a federal jury award against him.

>>> Plus, double decking I-17. It is just one idea of many being discussed to relieve traffic problems across the Valley. The MAG regional transportation plan passed a regional council vote today, but still has some hurdles to jump.

>>> Good evening, I'm Michael Grant.

>>> Jim Irvin has resigned from his position on the Arizona Corporation Commission. Irvin is seen here during last year's campaign. After six years on the state utility regulatory agency, Irvin tendered his resignation by letter yesterday just before 5:00 p.m.

>>> The last few years of Irvin's career have been filled with controversy. The beginning of the end came in 1999. That's when Irvin was accused of trying to undermine Southern Union's move to buy Southwest Gas in favor of another natural gas company based in Oklahoma which was offering less money. Last year a federal court agreed and slapped him with a $60 million judgment. Irvin's resignation ends a three-month investigation that could have led to his impeachment.

>>> Here now with more on this story, Howie Fischer, Chief Correspondent for "Capitol Media Services." Howie?

>> Howie Fischer: I thought I was here to talk about the trolly.

>> Michael: That's the second segment in the show. Let's start with the claim that Irvin has filed against the state. Do I understand correctly that they say they have run up another half million dollars in attorneys' fees in the past four to five months?

>> Howie: In essence in the last 5-1/2 months since the Governor cut off Irvin, they say they have spent about a half a million dollars. Now, they have a fairly high priced legal team, but the first question there is, excuse me, the verdict was done, I mean, we're just talking post-trial motions here. Now clearly there is a motion out there which the judge denied to reduce that $60 million verdict. There was a motion to set aside the jury verdict and now they have to prepare for the 9th Circuit. But that's a lot of money. I think that lawmakers are going to say, excuse me, we paid almost $5 million already on behalf of Mr. Irvin, and Jack Rose who was his hand-picked associate to deal with their legal fees to get him to the trial point. We also paid Mr. Rose's out of court settlement, we're not going to pay any more.

>> Michael: Of course, the vast majority of that $60 million award from the federal court is a punitive damage award. I seem to recall the statute is quite clear that the state will not cover that kind of expense, not with standing that that also is part of his claim for reimburse men; correct?

>> Howie: Well, you've got the question, is the punitive award, as you know, punitive awards are awarded by juries in this state only for what the courts have said an evil mind guiding an evil hand. You are talking intentional acts here, intentional damages. The judge, Roslyn silver, when she came back and looked at these motions, she said look, here's the evidence. The jury was convinced that Mr. Irvin was not acting in his capacity as a Corporation Commissioner, was not acting for the good of the state, but was acting on his own and should be personally liable. State law not with standing, the judge what heard the evidence said there is no reason to burden the taxpayers of the state with this financial penalty.

>> Michael: Any indication that Irvin or his attorneys have attempted any type of settlement with Southern Union?

>> Howie: The funny part is, no. While there were discussions pretrial which went nowhere, Mr. Irvin has put out feelers from several people having to do with his resignation, but the one group he really didn't approach was Southern Union. I mean, here were the people, while they had no control over his impeachment, we're talking $06 million. The feeling is that perhaps he feels I've got three, four, five million in assets, if I liquidate everything, they are not going to get $60 million, it's immaterial. He could also declare bankruptcy.

>> Michael: File for bankruptcy, all right. Let's go back to the House of Representatives. Will the House report still be filed and if so, when?

>> Howie: It's going to be filed. I think we're so far down the road -- remember, it's three months since they hired Mel McDonald to take a look at all of these charges, charges dealing with the failed purchase of Southwest Gas. Related issues that came up of harassing a commission employee, of whether Jim and his wife in fact tried to fabricate evidence in that trial, plus did you other corollary issues. At this point, Mel had done his interviews. He was already scheduled to report by the first of the month. He said, I'm just going to finish the report and put it out. The fact is, even if he had decided not to or even if the house speaker said oh, it's sort of moot, you know that there would be public records requests. I mean, Mel is being paid along with all of his expenses, somewhere close to $250,000.

>> Michael: At this point in time, though, has he ceased his investigation and is concentrating only on the writing and, we assume, perhaps, the third drafting of that report?

>> Howie: Yes. Mel said yes after the resignation that he was still doing interviews, but there is no reason to do any more. He pretty much has what he needs. He is researching the facts and then comparing it to laws. I think a lot of what we're going to see when he issues his report, these are the applicable state laws, and this is what Jim Irvin did, and here's why I believe that what Jim Irvin did fits under the category of high crimes and misdemeanors or malfeasance, which are the three grounds for impeachment.

>> Michael: Last week, there was a report that Irvin approached the house and offered to resign in exchange for basically killing the report. Is that now a confirmed?

>> Howie: Yes, Irvin in fact did prepare essentially a conditional resignation letter. This was one of two efforts that he had to try to minimize, perhaps, fallout from this. One of them is he -- his attorneys had approached Rick Romley's office and said look, can we get criminal immunity from anything that comes out of Mel's report in exchange for a resignation. Romley basically said over his dead body. The other was an offer to resign on the idea that you not only stop the investigation, but somehow seal the report and make sure it didn't get the light of day. They went to court to ask for a court order to do that, assuming they could be done. Jake Flake made it very clear, he was not going to deal. And I think that those two rejections, coming within the past week, was what finally drove it over the edge. There was a third factor which was already in play which we knew about, which is what we talked about, the fabrication of evidence. Mel McDonald was looking not only at what Jim Irvin had done, which is the only thing he legally needed to look at for impeachment, but whether his wife played a role in presenting some evidence to the Court in that civil trial, and if in fact Mel would say there appears to be a fraud upon the court here, which is what the judge said appeared to have happened, then you have a situation where the prosecutors come back here and say wait a second, maybe we should be charging these people in this case.

>> Michael: Let's move to who fills Jim Irvin's seat. A lot of speculation, a lot of names. Let's go through them one by one.

>> Howie: Let me make it simpler, let's eliminate every white male Maricopa County resident. We've got four on there now. The odds of Janet Napolitano naming another white guy to this board are slim. So that leaves women from throughout the state and Pima County residents. There hasn't been a Pima County resident on that commission in close to two decades. One of the names being suggested is Carol Sommers, a one-term Republican lawmaker from Tucson, active in Republican politics. Good, safe choice, a moderate Republican. Another name being thrown out is Betsey Bayless, who is currently the head of the Department of Administration, Republican credentials, was the Secretary of State, was a Maricopa County supervisor. For Betsy, she would have to take a big pay cut to take the job.

>> Michael: Peggy Bilsten indicated she was not interested to in the job? She was just reelected to another four-year term on the council.

>> Howie: I talked to Peggy today she said the obligatory I'm very honored to be considered, but I'm much happier serving the council. She said it's a good job. It's got a lot of possibilities. Look, I just ran for reelection. This would be a bad idea. The other person who took his name out of the running is Jack Jewett, a former state lawmaker, now on the board of regents in Tucson. He said there is no particular reason he would want to come up here and deal with this.

>> Michael: Any indication from the Governor's office on timing of the appointment? She's got 10 days.

>> Howie: Well, I have a feeling that they've already made an offer at least tentatively to someone. It would not surprise me to have something by the time we're doing the Friday show.

>> Michael: Okay. Howie Fischer, thanks for the info.

>>> As Maricopa County explodes with growth, our transportation system struggles to keep up. The Maricopa Association of Governments' Transportation Policy Committee's Regional Transportation Plan covers a wide range of transportation projects. That plan has been in the works for more than three years. It has undergone study and a public input process. Last week the plan was unanimously approved by the MAG Transportation Policy Committee and tonight the regional council voted to approve the plan for air quality testing. Street improvements, transit, part of the $16 billion plan, but freeways will take the lion's share of the funding. We will talk more about the plan in a moment, first Merry Lucero tells us about improving traffic on one valley freeway.

>> Reporter: 40-plus miles of freeways, including the outer loop, the Agua Fria, the Pima and the Price Freeways have been completed since 192. The Red Mountain and Santan freeways are due to be finished by late 2006, but I-17, one of the first interstates to be completed nationally, goes back to the late 1950s. Those who live and work in the area say it's time for a change.

>> Ron Friesen: It's a scar in the desert. I think it's really ugly, and we go all around town. We go to the 101 all over town, Superstition Freeway. We see beautiful freeways, beautiful landscaping, what do we get here? Gray sidewalls, not very pretty.

>> Reporter: Ron Friesen chairs Black Canyon CLOUT, short for Community Leaders Organizing for Urban Transformation. They represent homeowners, businesses and citizens from Indian School to Dunlap on the 17 and west to 43rd Avenue. Relieving congestion and streets is a big issue. Dr. Frank Beaudrot is a chiropractor and has a clock repair shop in the area.

>>Frank Beaudrot: I see the abundance of traffic coming up and down 27th Avenue like they are bypassing the freeway at this point to get to where they need to go. It's almost as if they would rather use the surface streets than use the freeway.

>> Reporter: Bev Harvey is a neighborhood activist and member of CLOUT. One of her concerns, safety.

>> Bev Harvey: These bridges that we're standing on are great bridges for speeding traffic. That's their job. They do it well, but as a consequence they have endangered our pedestrians. We have a lot of kids who go to cross this bridge to go to a local high school, and every day, they really take their lives in their hands when they cross this because of the traffic patterns. It is very dangerous.

>> Reporter: Pollution and noise are also concerns. This freeway was designed according to the standards when it was built. Now it poses some unique problems. Eric Anderson, Maricopa Association of Governments, Transportation Director.

>>Eric Anderson: I-17 is a particular challenge because we don't have any more right of way to deal with. There's frontage roads and businesses really that line both sides of I-17, and so one of the options we're looking at is going up and building a second deck on I-17 to try to have some express lanes that allow people to travel an 8 or 9 mile section a lot more quickly than they can today.

>> Reporter: The I-17 double-decking idea came out of a MAG bottleneck study from earlier in the year.

>> Ron: When I first heard the idea, I thought it was crazy. I'm warming up to the idea. I think it has some potential if we can think about it in terms of an attractive, esthetic way of dealing with the issues. We as a neighborhood really want to be involved in discussions about what that looks like, because we have a lot of concerns about what the implications will be.

>> Reporter: Double-decking is still in the conceptual stage. There are engineering issues as well as community concerns to work through before it can be addressed as a real possibility.

>>Eric: Our challenge is multifold. One is how do you get people on the second deck and then back off. Obviously you have more cars in a corridor and side streets and surface streets have to be improved to handle that additional traffic. And then I think most importantly, we have to look at the neighborhood impacts, the additional noise, traffic impacts. Those have to be mitigated and that's going to require quite a bit of further study and working with the neighborhoods all along I-17 to make sure it's a neighborhood friendly project.

>> Bev: We're also concerned that whatever is done not be a slum maker, not drive down property values and cause our area to go downhill instead of improving it. We're undergoing revitalization right now. We don't want to be double crossed by this plan and find out that all of the work we're doing to improve the quality of our neighborhoods, businesses and community is then sabotaged so people going from the north part of the Valley can get quicker downtown, bypassing us and we go downhill.

>> Reporter: The transit plan must first be passed by the state legislature, then a ballot measure to extend the half cent sales tax to fund it will be placed on the ballot to go before voters next May.

>> Michael: Here now with more on the Mag Regional Transportation Plan, state representative Gary Pierce, the Chairman of the House Transportation Committee. Neil Giuliano, chair of MAG's Transportation Policy Committee and Mayor of Tempe, and Marty Schultz, Vice President of Government Affairs for Pinnacle West and a member of the Transportation Policy Committee. Gentlemen, good to see all of you. Marty how solid are the revenue projections? As you know, 18 years ago those got us in a lot of trouble.

>>Martin Shultz: These revenue projections are solid. They are conservative. They come from several sources. They were tested by economists. We're confident as one can be considering this is a 20-year plan.

>> Michael: Here's what made me suspicious. I recall reading a comment from you in an earlier draft of this plan that well, we're about $800 million or so short, but in this universe, that's not substantial. Then I read we add another half billion or so in street improvements, and we've got a $1.3 billion contingency plan. I was having a hard time putting all of those numbers together.

>> Martin: What you didn't recall reading but I'm sure you did, was at one point we had modified the revenue estimates to take in the entire 20 years, because I think there was an initial estimate of about 19-plus years and so as I said, the economists pour over this from the beginning of this process through this period where it's been unanimously approved and I'm confident that these projections are good, solid projections and will serve us well.

>> Neil Giuliano: There is a $350 million savings that ADOT was able to come up with through value engineering and reviewing of programs that they were planning over the next 20 years.

>> Michael: Representative Pierce, you said there was some right of way that had been purchased?

>> Gary Pierce: Maricopa County has been active in acquiring a right of way and they had to along the 303. ADOT went back and said some of this has been bought and purchased so a lot of money was found that was legitimate. Once they stopped and looked and each agency stepped back and took a look, I think that's where a lot of the money came from.

>> Michael: Is this a good 50,000 foot summary of this thing, the West Valley gets freeway, the East Valley gets street improvements, and Phoenix gets light rail?

>> Neil: A grand simplification of a very complex issue, but generally, you're right. What we've been able to do with the plan is balance those very diverse needs representing existing growth patterns, where the growth has come over the last 20 years, and where we project the growth to go over the next 20 years. So yeah, you're pretty accurate in looking at it that way. The core of the Valley is congested. We need to have serious congestion mitigation efforts in the core of the Valley. We need the freeway system in the outer ring of the Valley and we need to fix streets all over.

>> Michael: It seems to me that one of the large controversial issues for the voters is going to be the light rail -- not necessarily the mass transit component of this, but the light rail component of this.

>> Neil: Yes and no. If you look at the Phoenix election, it was the light rail component of the City of Phoenix election a few years ago that received the most support and drove them to the level of victory that they had. Our initial polling right now is showing a good 70% of the voters saying that they like the mix of the plan, including the component of light rail for it. While that's viewed as controversial and while it may not touch the outer limits of the region, it is clearly something where the core and the mass of the voters in the region are today.

>> Michael: Representative Pierce, do you think that aspect of the plan is going to have trouble with the legislature?

>> Gary: I think the legislature is going to be concerned that if there are any perceived projects and freeways and arterials that are not funded and that the money is being sucked up by light rail, that's a perception we'll have to deal with because obviously there is not enough money in this -- we're not going to raise enough money to do all of the things we need to do in this valley. And so light rail has got to really bear itself out in the plan. That's what the legislature is going to really look at doing, is making sure that we are able to audit light rail as we build light rail. Phoenix will have their lines in. We'll be able to look at that audit and make sure we account for the dollars, whether they are -- it's a sound investment or not. And so, I think from the legislature's standpoint, 32% of this plan is transit. I think the legislature would have been comfortable with half that, with the bus part, I think they would have been. From the light rail standpoint, because that is the lightning rod, I think we have to make sure people are secure that if it's doing its job, we fund it, if it's not doing its job, we need to not pour money into a black hole.

>> Michael: Marty, there are two issues I hear with the light rail component. Number one, it's a lot more expensive than buses, and number two, at ground level, it actually may exacerbate traffic congestion as opposed to helping traffic congestion.

>>Martin: Light rail is less expensive than buses to operate and so that -- to operate. The capital investment is a combination of local money plus federal money, and so I think that the light rail as envisioned and financed is a solid financial plan, but I think to your question earlier, to the mayor about the plan, while you did summarize, there are important additions. Number one, with regard to light rail and an intensive bus system, and with regard to HOV lanes, which will be the lanes used for the park and ride and for the bus rapid, these are all factors that are going to go into the transportation system but are necessary in a congestive corridor. You do light rail and bus system because of congestive core. So you need those kind of alternatives.

>> Michael: Does it make sense to put a ground level light rail through the center?

>> Martin: I think it does because it makes financial sense. For us to bury it or to put it above ground, really wouldn't make financial sense, and because we have the benefit of wide streets, you know, the designers of our original streets actually made wide streets, this light rail is going to work.

>> Neil: We actually for a five-year period before we even started the -- looking at this specific plan, we went through public hearings all over the valley and from the time the City of Phoenix passed their election until today, there has been talk and even before the City of Phoenix election to determine what mode of this expanded mass transit program would we put on the ballot. The difference between an elevated rail, a light rail, a commuter rail, all of that was studied for really years before even the City of Tempe election in 1996, then the Phoenix election. So the conversation about, oh, gee, why is it light rail now, those are conversations we've had for a long time, and we've really been able to bring, I think the public along, represented in the City of Tempe vote, the City of Phoenix vote and moving forward with this vote. I think it's going to find the support, even from some of the legislators when we have a chance to work with them.

>> Michael: But representative Pierce, will the legislature consider this concept, okay, let's go with phase I of light rate, that being the backbone that I think we're familiar with that goes through Phoenix --

>> Gary: That Phoenix and Tempe will be financing --

>> Michael: Right, but we'll hold up and see how that does before we commit an additional increment to light rail? Is that a possibility?

>> Gary: That's a possibility. I think your question is should we have raised this is really valid because I have not seen a study that tells me how much the difference is at grade and what it would cost to raise this. And I think that's an issue with some people. We made a trip to Dallas. They had it where it was above in some areas and below and at grade and I think it's a concern for some of us because we know -- always at grade, that there is going to be a curve around this and where there is gates coming down, you can make a left turn or cross that street. You've got to make right turns. People will have to learn how to you use the streets around where a light rail corridor is.

>> Michael: I've heard that five city council members said if the legislature tinkers at all with this, we're going to pull out of the plan.

>> Gary: I heard that today as well, and I think I reacted pretty strongly to that already when "The Arizona Republic" informed me of that, but I think it's foolish to take a stand like that, when in fact I've seen some pretty narrow bills come through the legislature and almost all of them are changed in some form, unless they are just a bit of a text change from a bill a year or two earlier for a change. So I think it's reasonable to expect that the legislature is going to view this differently than mag does, and recognize that the political forces at mag may have not wanted something specifically to go on. For instance, accountability for light rail. That might not be enjoyed by the folks in Phoenix, but in order to get this to pass the legislature so it can get on the ballot, I think the legislature -- I think it's incumbent upon the legislature to firm that up.

>> Martin: But to offer a business community standpoint and perspective, MAG has been maligned over the years, but they decided as a group to allow the business community to participate with the local elected officials to put together a transportation plan. The legislators were also part of this because they established House Bill 2292, and it had Gary's name on it and they set up the process. Here's what happened in summary. You have the local elected officials, the mayor of Mesa and the mayor of Gilbert and mayor of Glendale, I could go through 23, 24 cities, all demonstrated that they need to get certain facilities for their communities and for their neighborhoods. And there was a lot of rhetoric. There was a lot of coverage in the newspaper. You covered it on your show. Many of the elements as we are discussing, the East Valley and the others. In the end, however, they recognize by rising to the occasion, that we need a regional transportation system. It's my expectation that the chairman and his committee and the legislature, both Senate and the House, working with the leadership are going to hear from the business community. They are going to hear from the local elected officials about the fact that this plan was population driven. It's technically correct. It's financially driven, and those are sound projections, and for a growing economy, we need to have this plan.

>> Michael: Should the legislature buy this hook, line and sinker?

>> Neil: We're in a partnership with them, the same way we're in a partnership with our residents for whom we're advancing this plan. I think when we have the opportunity to have dialogue with the chairman's committee and the folks in the senate and all of the folks in the legislature, they will see that this is a balanced plan. We had all of the philosophies that Chairman Pierce here has talked about with regard to light rail present and articulated at our Transportation Policy Committee meetings. So the view, the wide spectrum of views, we would like light rail, we're not thrilled with light rail, what about elevated bus rapid transit, all of those views were a part of our process and the product is a representation of all of those views.

>> Michael: Out of time, but how likely this passes to get it on the ballot in May at the legislature?

>> Gary: How likely? I think it can be done. I think that there is work that has to be done and educating the other legislators. It's important that we do that.

>> Michael: Representative Gary Pierce, thanks for being here. Neil Giuliano, good to see you. Marty Schultz, thanks to you as well.

>>> For transcripts of this program, related web links to tonight's topics and other information about "Horizon," check out our web site, www.kaet.asu.edu. Click on "Horizon" and follow the links.

>>> Coming up tomorrow on "Horizon," there is a push for a special taxing district to fund the Maricopa County hospital. We'll talk with folks on both sides of that fence. Following "Horizon" tomorrow is Channel 8's "Horizonte," covering Arizona issues through an Hispanic lens. Friday, of course, the journalist round thing. Thanks for joining us on a Wednesday evening. I'm Michael Grant. I hope you have a great one. Good night.

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