Audit Looks At Challenges For Arizona Veterans’ Homes During Pandemic And Expected Changes To Veteran Population

Audit Looks At Challenges For Arizona Veterans’ Homes During Pandemic And Expected Changes To Veteran Population

By Terri Jo Neff |

The Arizona Department of Veterans’ Services has reported 16 resident deaths among its two State Veterans’ Homes as of March 14 and has corrective deficiencies which led federal regulators to cite both homes, according to a recently issued Arizona Auditor General performance report.

The audit required by the Joint Legislative Audit Committee provides state officials and lawmakers with detailed information about operational matters with the Veterans’ Homes which provide skilled nursing and rehabilitative care for geriatric and chronically ill veterans and their dependent or surviving spouses.

Currently the Department operates a 200-bed facility in Phoenix and a 120-bed facility in Tucson. In addition, construction is underway on two 80-bed homes in Flagstaff and Yuma which could be ready to admit residents in FY2022.

Among the issues auditors reviewed was compliance with state licensing and federal certification requirements. Both the Phoenix and Tucson homes were cited by federal regulators between 2017 and 2019 for health, safety, and quality-of-care deficiencies, but corrective action was taken in response, according to the April 12 report.

“The Phoenix Home was cited for more (Centers for Medicare & Medicaid Services) health deficiencies and the Tucson Home was cited for fewer CMS health deficiencies than State and national averages,” the report states.

For FY2020, the Homes took in about $40.4 million in revenues and had nearly $37.4 million in expenditures. State law requires the facilities to be financially self-sustaining, so the Department will rely on the Homes’ Trust Fund’s current $30.3 million balance to cover the initial operating costs of the new Veterans’ Homes in Flagstaff and Yuma once those facilities open.

The U.S. Department of Veterans Affairs (VA) provided 65 percent of the construction costs for the new homes.

The audit report also addresses the ongoing discussion about adding new Homes and other long-term care options for Arizona’s veterans, and where such facilities might be located. But auditors noted VA projects Arizona’s veteran population to decline significantly in the next 25 years.

“Arizona’s population of veterans age 65 years and older is projected to decline about 47 percent from approximately 255,000 veterans in 2020 to 136,000 veterans in 2045,” the report notes.

In addition, many veterans and their families are interested in shifting toward more cost-effective, home-based or community-based services rather than centralized nursing homes in large cities.

“Research on long-term care services we reviewed indicates that older people prefer home- and community-based services, including assisted living, more than nursing home care and that nursing home use is gradually declining in the country,” the report states. “The VA has also stated its goal is to keep veterans in their homes, if that is their desire.”

Challenges brought on by the COVID-19 pandemic were also addressed in the audit report, which notes that screening procedures, restricted visitor access, and routine staff testing were implemented at both homes, as were resident vaccination protocols.

In addition to the 16 resident deaths reported, 70 of the 190 residents across the two homes and 97 of 306 staff members were reported to the Arizona Department of Health Services as COVID-19 “cases” as of March 14.

The audit also found 159 residents across the two homes received at least one vaccination dose as of March 26, while only 190 of the 306 staff members had begun the vaccination regime.

Maricopa College District’s Academic Freedom Pledge And Payout Settles Professor’s Claims

Maricopa College District’s Academic Freedom Pledge And Payout Settles Professor’s Claims

By Terri Jo Neff |

The Maricopa County Community College District’s (MCCCD) decision last month to approve a $155,000 settlement to a Scottsdale Community College professor ensures the district, the college, and staff members will not be sued for how they handled an Islamic student’s complaint against the professor.

Nicholas Damask received the payout in response to an October 2020 notice of claim against college officials who publicly criticized the longtime professor’s curriculum in a World Politics course. A notice of claim is mandated by state law before a lawsuit can be initiated against the state or any political subdivision, including boards, commissions, committees, and districts.

Damask has agreed to not make negative statements about District employees nor how they handled the student’s April 2020 complaint about quiz questions related to terrorism and Islam. His attorney was to receive $30,000 of the settlement, public records show.

In a related matter, a federal lawsuit filed by the student in June 2020 against Damask and the District in an effort to stop the professor from teaching about negative aspects of Islam was dismissed by Judge Susan Brnovich of the U.S. District Court. The lawsuit alleged the professor required students to express agreement with anti-Islam views in order to receive a passing grade.

An appeal of the dismissal is pending at the U.S. Court of Appeals for the Ninth Circuit. The District has until April 23 to file its response and Damask has a May 21 deadline.

Damask’s initial claim against MCCCD sought $500,000 based on his contention that Scottsdale Community College officials placed the professor’s reputation in question by not doing enough to defend him against the student’s allegations. The claim also cited concerns for the safety of Damask and his family stemming from threats stoked by the controversy.

Within days of the student’s complaint -which was fueled by social media attention- the college president publicly apologized for the professor’s conduct, disparaged the quiz questions, and said Damask would issue an apology.  However, MCCCD Interim Chancellor Steven Gonzales contradicted the college president by issuing an apology to Damask.

Gonzales also bemoaned Scottsdale Community College’s “rush to judgment” undertaken without “full consideration for our professor’s right of academic freedom.”

In response to the student’s complaint, Damask argued that the disputed questions dealt specifically with a section of the coursework about terroristic sects within Islam. Similar sects in other religions were also covered in the class, he said.

One outcome of Damask pushing back on how the student’s complaint was handled is that district officials undertook a review of policies and training for how to respond to such matters. That review led to plans to establish a Committee on Academic Freedom.

The settlement also restates that faculty members will have the freedom to choose the materials they use with a course curriculum.

Arizona Supreme Court To Decide Conflict Of Interest Allegation In Case With Statewide Implications

Arizona Supreme Court To Decide Conflict Of Interest Allegation In Case With Statewide Implications

By Terri Jo Neff |

On Feb. 12, 2019, Pat Call had been serving on the Cochise County Board for more than a decade representing for the Sierra Vista area, which includes the Army’s Fort Huachuca. It was also the day Call and his two fellow supervisors took part in a public and then a private meeting which ended with his appointment as justice of the peace of the Sierra Vista Justice Court.

The new job paid twice Call’s supervisor salary despite the fact he was not an attorney and had no judicial experience. But there was no advance public notice that Call was even interested in the position, and during the meeting Call suggested the board not utilize a nomination committee to review any perspective candidates, all of whom were lawyers with experience in justice court operations.

The Arizona Supreme Court announced Wednesday that it will hear a local resident’s challenge to Call’s appointment based on alleged violations of Arizona’s Open Meeting Law and Conflict of Interest Statute. The case is being watched by public agencies and government attorneys across the state.

“When it comes to holding public officials accountable for backdoor deals, this is the most important case in Arizona history,” appellate attorney David Abney said after the justices accepted the case for review.

Abney is one of three attorneys representing David Welch, the Sierra Vista resident who challenged the appointment. He told AZ Free News it does not matter that Call’s term on the bench ended in December 2020.

“There are still penalties and sanctions that can be assessed against those who violate the open-meeting and conflict-of-interest laws,” Abney said. “So Justice of the Peace Call’s departure does not insulate him or his collaborators from liability.”

The county defendants contend they did nothing improper in filling the court vacancy, and point to the fact the Cochise County Attorney’s Office provided legal advice throughout the process.

“The Arizona Legislature has made clear that, for a plaintiff making claim to a private right of action under Arizona’s conflict of interest or open meeting laws, he or she must be ‘affected by’ the alleged violation,” according to the county’s petition for review to the supreme court. The county contends Welch has no standing to challenge the board’s action. 

Welch lives within the boundaries of the Sierra Vista Justice Court and had a misdemeanor case pending at the court at the time of Call’s appointment. His case would have been heard by Call, but the county attorney’s office had the case dismissed the day Call took office.

The county later invoked the ratification option in Arizona’s Open Meeting Law to reaffirm Call’s appointment as justice of the peace during a special meeting in March 2019. Welch, however, takes the position shared by Arizona Attorney General Mark Brnovich that the supervisors may still be open to personal liability if it is shown they engaged in misconduct.

But it is not only the open meeting law issues that Welch has challenged.

Public records show Call engaged in discussions about how to fill the court vacancy he was awarded a few hours later. He also took part in an executive session with the other supervisors, a deputy county attorney, and the county administrator just before being appointed.

Arizona’s conflict of interest statute requires a public officer who has a substantial interest in any decision of a public agency to make known such interest. Then the public officer “shall refrain from participation in any manner…in such decision.”

There is no ratification option in that statute to simply “do-over” or reaffirm a decision.

A judge from outside Cochise County initially dismissed Welch’s complaints on the basis of a lack of standing to bring the challenges. That ruling was overturned in a unanimous Arizona Court of Appeals decision in October 2020, which sent the case back to the lower court for a new hearing on Welch’s arguments.

For now the case is on hold while the supreme court reviews the appellate decision. Attorney Chris Russell has been on Welch’s case from the beginning and understands some residents are frustrated the case has been going on more than two years with no immediate end in sight. But he is looking forward to the attention the Arizona Supreme Court’s review will generate.

“Corruption thrives in the darkness,” Russell said. “Without open and transparent government free from conflicts-of-interest we are no better than a cabal run by the rich and powerful. History has proven that such a circumstance is always detrimental to the people.”

The supreme court has given the parties until early May to file any updated legal briefings before oral arguments are conducted later this year.

Sedona Airport’s Tour Company Lease Dispute Awaits Consideration By Arizona Supreme Court

Sedona Airport’s Tour Company Lease Dispute Awaits Consideration By Arizona Supreme Court

By Terri Jo Neff |

The Arizona Supreme Court has been asked to review a decision by the Sedona-Oak Creek Airport Authority to evict a longtime leasee in a nearly decade-long dispute that has involved a federal judge, the Federal Aviation Administration (FAA), and the expenditure of hundreds of thousands for legal services.

In April 2019, the Airport Authority initiated eviction action against Dakota Territory Tours ACC, which has operated at the airport for several years. The company also operates as Sedona Air Tours and Red Rock Biplane Tours.

Dakota Territory has specialized in air tours of the Grand Canyon area since 1994 with fixed wing aircraft and helicopters, many which can seat four to six passengers. The Airport Authority contends Dakota Territory has not had a valid sublease at the airport since July 2017 and has attempted to evict the company since then, but various legal actions have delayed the action.

A Yavapai County judge put the 2019 eviction action on hold while the parties litigated whether Dakota was lawfully present at the airport. The court’s decision came down against the company, and in January of this year the Arizona Court of Appeals affirmed the lower court ruling.

A petition for review was filed by Dakota Territory with the Arizona Supreme Court in February, and the Airport Authority has submitted a response. If the justices decide to hear the case it would likely be months before a decision is issued.

According to public records, the Sedona-Oak Creek Airport is situated on land owned by Yavapai County, although the county plays a limited role in what happens there. Instead, the Airport Authority leases the property from the county for $1 per year and runs the day-to-day operations under the supervision of an airport director.

Dakota Territory Tours’s dispute with the Airport Authority can be traced back to a 2012 sublease which allowed the company to fly in and out of the airport. A series of amendments kept the sublease in effect through April 2017 at which time the deal was kept in effect per a settlement agreement between Dakota and the Airport Authority in connection to a lawsuit the company filed in 2014.

Part of the agreement called for Dakota to continue to use its space while the Airport Authority put together a formal Request for Proposals (RFP) for that space.

Then in June 2017, the Airport Authority awarded the sublease for tour company space to Guidance Air Service LLC, another longtime leasee. The award made Guidance the only air tour company that would operate at the airport without paying high airport use-fees.

Less than 10 minutes after the RFP was awarded to Guidance, an attorney for the Airport Authority sent Dakota a letter demanding the company vacate its leased space within 30 days.

Dakota protested the award, alleging Airport Director Amanda Shankland altered the selection criteria at the last minute and accepted Guidance’s bid even though it would purportedly provide 32 percent less in revenues for the airport.  The company also alleged the RFP process was “rigged” to ensure no air tour provider other than Guidance could emerge the winner.

Shankland denied Dakota’s allegations and rejected the challenge, arguing that the airport could not support more than one air tour operator.

In August 2017, Dakota and a partner company sued the non-profit Airport Authority, Yavapai County, Guidance, and Shankland in federal court. The anti-trust lawsuit alleged the Airport Authority lodged a false complaint with the FAA against about the company and failed to comply with the settlement of Dakota’s 2014 complaint.

The federal lawsuit also alleged the airport’s Master Plan allowed for more than one tour operator, and that the RFP process “was intended to and will ultimately foreclose and end competition” for airport-based air tours of the Sedona area.

A federal judge in Prescott dropped Yavapai County and Guidance from Dakota’s lawsuit in 2018, but allowed the claims against the Airport Authority and Shankland to move forth. In April 2019, that same judge dismissed the case per a stipulation among the remaining parties, “with each party bearing its own costs and attorneys’ fees in this action.”

With the federal case dismissed, there was nothing stopping the Airport Authority from moving forward with enforcing the 30-day vacate notice through a forcible detainer action with the Yavapai County Superior Court. By then, a number of concerns had been documented in various court files.

For instance, the Airport Authority presented an independent consultant to provide expert testimony to support one of its arguments against Dakota. However, neither the expert nor the Authority revealed to the court that the expert was affiliated with Guidance.

There is also a record showing the complaint made to the FAA about Dakota was found to be unsubstantiated. And that if Dakota could no longer be based at the Sedona airport then the company would have had to pay the Airport Authority for every takeoff and landing at a non-leasee level.

That would have cost Dakota, which employed about 20 people, to pay about $45,000 per month, based on its late 2018 to early 2019 flights.

If the Arizona Supreme Court refuses to hear Dakota’s appeal then the company will be responsible for paying the Airport Authority’s legal expenses related to the eviction action.

State’s Rainy Day Fund Eyed As Support For Tax Overhaul

State’s Rainy Day Fund Eyed As Support For Tax Overhaul

By Terri Jo Neff |

What to do with Arizona’s $350 million or so surplus has a lot of legislators pulling out their calculators and trying to figure out how best to spend the money, and whether to implement Gov. Doug Ducey’s proposed permanent tax cuts.

Among the leading contenders for allocating the surplus funds to increase some public health and healthcare spending, increasing funds for higher education, and addressing the state’s unemployment situation. One issue likely to be front and center is what consideration should be given to COVID-19 relief funds received from the federal government in deciding how to divvy up the surplus.

The Finance Advisory Committee will meet Thursday at Noon to discuss this year’s budget process. But two ideas for using the state’s surplus to change Arizona’s tax system are already gaining momentum.

One option is to convert the state to a flat income tax, something that would likely need to be transitioned to over a two to three year period. A sales tax is an example of a flat tax, where everyone pays the same percentage.

It is an idea popular this year among Republican legislators, with heavy support from House Majority Leader Ben Toma, Sen. J.D. Mesnard, and Rep. John Kavanagh. However, coming up with a plan that can receive enough votes will be a challenge, given that legislators have differing ideas of how a flat tax system should work.

Another option for utilizing the surplus is to implement permanent tax cuts, such as the $600 million of income tax cuts proposed by Ducey in his 2021-2022 budget. The governor’s proposal would phase in the cuts over three years starting in 2022.

Other tax cuts could involve reductions in residential and commercial property taxes, although many cities and towns are opposing that idea.

More will be known after Thursday’s meeting as to what consensus House leaders can come up with.