December 19, 2019
By Timothy Sandefur
Pima County’s been
playing favorites in its hiring practices—and the Goldwater Institute’s
challenging it.
When Pima County
officials decided in January 2016 to build a $15 million headquarters and
launchpad for a private company called World View to use for its
balloon-launching business, it needed an architect and a contractor to design
the project. Fortunately, it already had a few handy. That’s because half a year earlier, the county
had begun holding private meetings with an architect and a contractor that had
been handpicked by Pima County Administrator Chuck Huckelberry. For five
months, these companies planned out the project to such a degree that by the
time Huckelberry informed the Board of Supervisors that the project existed, it
was already a third of the way finished.
That, of course,
gave the Board all the reason they needed to hire the architect and
contractor—who, after all, had such a head start that the Board thought nobody
else could possibly finish the project on schedule.
All of this is
illegal favoritism. Arizona law sets out a detailed procedure for hiring
contractors and architects—and among other things, the law requires counties to
enter into written contracts for such services, and to pay for such services.
But rather than follow the law, the county planned the World View project
through five months of secret meetings for free. The contractor and the
architect participated because, as they later testified, they hoped the county
would reward them by later giving them the contract.
Not only is it
illegal for Pima County to get services like this for free, but it’s also
illegal for the county to give a head start to contractors in this way. In
fact, experts refer to this kind of favoritism as “unequal access to
information” favoritism; it happens when the government gives information to
one contractor that makes it impossible for any other contractor to compete.
And as with all favoritism, it hurts taxpayers because public contracts end up
going, not to the cheapest or best qualified companies, but to those who happen
to be wealthy enough already to afford giving the government free services—or
well connected enough that Chuck Huckelberry invites you to participate.
The county argues
that it doesn’t have to follow the procurement laws because doing so would have
been “impracticable.” And it’s true that the law includes an “impracticability”
exception. But that exception only applies to urgent necessities, like if a
flood washes out a bridge. It wasn’t designed to allow county officials to
disregard the law simply because following it would be inconvenient.
Nevertheless, waiving state law is par for the course in Pima County, which in
the past five years has invoked the “impracticability” exception almost 80 times. That’s more than once
per month.
Simply put: Pima
County regards following the state’s procurement laws as optional.
We sued over this
arrangement on behalf of Pima County taxpayers. Unfortunately, the Court of
Appeals ruled that the case had taken too long, because construction on the
World View project had finished before the court ruled. In a petition
we filed today with the Arizona Supreme Court, we argue that that’s not good
reason to deny taxpayers their day in court. On the contrary, the court can
still rule that county officials violated the law—and should, because the county
has made clear that it will certainly do the same thing again next time.
And that would be
a shame, because the World View project has been a predictable failure.
Although the county claimed that spending $15 million in taxpayer money to fund
this private balloon tourism company would help create jobs, World View
announced earlier this year that it was laying off staff, not hiring more. It has never
fulfilled its promise to employ 100 workers, as agreed to in its arrangement with
Pima County, and although it told the county that it would be taking tourists
on rides, it also changed its mind about that in February—around
the same time that it replaced the CEO who had championed the company’s arrangement
with Pima County. Meanwhile, the county continues to raise taxes, and was rated this summer as
the worst place in Arizona to try starting a business in—a
title it’s held for years.
In other words, if
you’re a business owner in Pima County, it’s not what you know, but who you know.
It’s not
surprising that government is bad at picking winners and losers in the economy.
Economic growth results from consumer demand, not from political deal-making.
And if there had been a consumer
demand for World View’s services, it could have obtained start-up funding from
a bank or from private investors. Instead, it had to get
government subsidies, paid for by taxpayers who had no real say in the
matter—precisely because nobody would voluntarily take on such economic risk.
As we explained in 2017, there’s a better way for Pima
County to improve its economy: by focusing on the ordinary business of
governing, instead of trying to play kingmaker—a role it’s obviously not well
suited for.
You can read our
petition to the Arizona Supreme Court here,
and learn more about the case here.
Timothy Sandefur
is the Vice President for Litigation at the Goldwater Institute.
