Friday, June 27, 2003 | 11:36 a.m.
A controversial newsletter the Boulder City government sent to all city residents about a month before the June 3 election addressed issues raised in the mayoral election but did not support or oppose a candidate, and so it did not break any laws, the Secretary of State's office ruled this week.
Former mayoral candidate Bill Smith, who filed the complaint about the newsletter, said he still thinks the newsletter violated a state law that prohibits governments from supporting a candidate.
"The intent of the law is that government agencies should stay out of campaigns," Smith said Thursday. But he said for the state to find the city violated the law, the city probably would have had to "put an ad in the newspaper saying vote for Bob Ferraro."
"It doesn't surprise me," Smith said about the ruling. "That's just the way one bureaucracy treats another bureaucracy."
Officials with the Secretary of State's office could not be reached for comment on the decision Thursday afternoon.
Ferraro, who beat Smith by 18 votes in the election, said the ruling confirms his and other city officials claims that there was nothing illegal about the newsletter.
However, the mayor said, because the newsletter left some people with the perception the city was getting involved in the mayoral race, the city will no longer send out newsletters during campaign seasons.
"That's the lesson to be learned here," Ferraro said.
Ferraro and other city officials initially defended the newsletter, saying it was just giving the public information about topics of interest.
The newsletter included pieces about the overall financial health of the city, the benefits of the new second water line, and the new city-owned Boulder Creek Golf Club.
Smith's campaign was based primarily on his claims that money borrowed to build the golf course and water line would become a financial drag on the city.
Smith called the newsletter a blatant attempt to help Ferraro win re-election.
Smith had also complained to the Secretary of State's office that Ferraro's campaign violated campaign finance rules in not reporting the in-kind donation from R&R Partners for the work of campaign coordinator Joe Demma.
Ferraro has said the donation would be reported on the next campaign finance report and hadn't been reported earlier because he hadn't received a bill.
In addition to prompting Smith's complaint, the newsletter played a prominent role in Ferraro's call for City Manager John Sullard's resignation a week before the election.
A financial report on the golf course presented during the last City Council meeting before the election showed the course had run a $480,00 operating deficit during its first four months open.
Pre-construction projections, which were included in the May newsletter, showed the course would turn a $60,000 profit after its first six months open.
Sullard said the projections were used in the newsletter because they were the latest reliable figures the city had at the time.
Smith said the city was covering up losses it knew about.
Ferraro said he thought the newsletter was reporting recent financial information, not re-stating old projections. He blamed Sullard for the misunderstanding, and accused him of disseminating misleading information.
Ferraro then called for Sullard's resignation. He did not resign, but will face a job review in about six months.
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