Staff and appointed officials at the Salt Lake County Water Conservancy District say Sandy Mayor Steve Newton isn't out to reform the district - he's out to destroy it.
Newton, who also represents Sandy on the conservancy district board, filed a lawsuit against the district to block a proposed bond issue of $18 million to $22 million dollars that would pay for a major water purchase the district is negotiating. The bond would also repay other internal accounts the district has borrowed money from.Newton wants Sandy out of the district, and believes the district's plan to sell its current headquarters and shop for $900,000 and move to a new $7.4 million complex it now has under construction shows the district's spending is unchecked and out of control. The deannexation and new headquarters are issues in the lawsuit.
Board Chairman Gerald K. Maloney said Newton was already working on the lawsuit when he made a motion to support a district plan to borrow money from its operations and maintenance budget to pay $800,000 for a separate water purchase. That amount was to be repaid to the budget to meet other contract needs once the bond was issued.
"Why did he do it?" Maloney asks, "Because he knew that $800,000 coming out of our operations and maintenance budget was something that would push us toward bankruptcy (if it couldn't be repaid by a bond)."
According to Newton's math, the district should still have $4 million in its O&M account after paying all of its outstanding contracts, but district officials don't see it that way.
Maloney said Newton began to attack people already in the district immediately after he was appointed by Gov. Norm Bangerter to serve on the board.
The first day Newton was on the board, Maloney said, "He shook his finger at me and threatened me and said he intended to destroy this district."
David Ovard, the district's administrative assistant, wrote a memo that was circulated to members of the board detailing his encounter with Newton during a November meeting. In that memo, Ovard said Newton screamed at staff members so loud and long it disrupted business in the entire building.
"Do you want to know what I'm after?" Ovard quoted Newton as saying. "It's (district general manager) Bob Hilbert. He's been here for 35 years. He's not accountable to anyone. No one's looking over his shoulder."
Ovard said Newton went on to say all of the board members are incompetent. Another district staff member who was asked to make a record of the meeting gave an account similar to Ovard's.
Newton told the Deseret News the board is a tight-knit club, an advisory board at best - not a decision-making body.
Several representatives of the conservancy district board met with Gov. Norm Bangerter's assistant chief of staff, Douglas Bischoff, asking that Newton be removed from the board. "They feel like they have cause (to remove Newton)," Bischoff said. "Like most internal conflicts, I don't know that either side is right."
Bischoff said it isn't likely the governor will pursue the request, but the conservancy district has asked to meet with him again.
The Salt Lake County Water Conservancy District board is one of three boards Maloney said he has been appointed to since the time he was elected mayor of West Valley City.
"I've never found an incompetent person on any of the boards I've been sitting on," Maloney said.
Sandy officials tried during the past year to negotiate a settlement with the district that would allow the municipality to deannex, so it could join the Metropolitan Water District of Salt Lake. After hearing from financial counselors involved with the district's various bond issues, the district voted against letting Sandy out. The group cited concerns that such a move would jeopardize the district's ability to issue revenue bonds backed by property taxes, which are collected by the district.
Newton charged the denial of Sandy's request is an example of how Hilbert and the board are not treating Sandy fairly. Hilbert said allowing a member entity to deannex would open the door for any or all of its entities to pull out, which would dissolve the district piecemeal.
Hilbert, who has been with the district since it was created in the 1950s, said he is personally offended by Newton's attacks and believes his district is well run.
"This is a very efficient organization. We run a very tight ship. We're not the shadow government some say we are," Hilbert said.
He also countered a contention by Newton that the new office building is built to meet the needs of the next 50 years. The new administration building will be fully occupied when it is finished several months from now, Hilbert said.
The bond is now stalled, pending the resolution of the lawsuit because Moody's Investors Service - an investment firm based in New York that issued a rating on the proposed bond - has now withdrawn the rating because of the lawsuit. The rating can be restored if the lawsuit is settled and all of the conditions outlined in the original bond proposal are the same, said Jerry G. Caden, assistant vice president of Moody's public finance department.
If the outcome of the lawsuit changes the district's circumstances, there would have to be further review before a new rating could be issued, Caden said.
Without the rating, the district would have a very difficult time finding a buyer for any bond issue, said Hilbert.