VOL. 16 ISSUE NO. 42   |  OCTOBER 20 – 26, 2010


Francia advises, ‘Never give up your rights to the state’

At the risk of being dollar stupid … from a financial perspective, I’m struggling immensely

lamar, francia
Steve LaMar and Vincent Francia
CAVE CREEK – During Monday night’s meeting, Mayor Vincent Francia announced Wild West Days was just around the corner and offered congratulations to Councilman Adam Trenk, who recently passed the state bar.

During Call to the Public, Bob Moore stated, “Two weeks ago there was a significant amount of noise” coming from a certain establishment in Cave Creek. He said calls were made to Vice Mayor Ernie Bunch as well as Town Marshall Adam Stein, both of whom contacted the offending business.

bob moore
Bob Moore
This past weekend, Moore said the noise at the same establishment was substantially reduced and he thanked Bunch and Stein for their efforts.

Utilities Manager Jessica Marlow provided background on her request to enter into a WIFA (Water Infrastructure Finance Authority of Arizona) loan agreement in the amount of $1.4 million for the purpose of replacing the town’s eight inch water line with a 16” water line from the Neary Tank to Rancho Mañana and from Canyon ridge Estates to Carefree Highway.

ralph mozillo
Ralph Mozillo
Councilman Ralph Mozilo asked what the consequences would be if they didn’t do the work, how the town would meet the expense and if it would go before the Water Advisory Committee.

Marlow stated it was supposed to go to the Water Advisory Committee but they were unable to assemble a quorum. She also explained, under the worst case scenario, there was more than enough money ($175,000) budgeted for Black Mountain water line replacement that could be used to make the first debt service payments of $9,000 in January and $88,000 in July if necessary.

fred rosenfeld, jessica marlow
Fred Rosenfeld and Jessica Marlow
Town Attorney Fred Rosenfeld explained the agreement with WIFA does not permit moving funds from the water company to the general fund because it’s a first lien.

Mozilo and Councilman Jim Bruce asked why water company revenue of $750,000, previously transferred to the general fund, couldn’t be transferred back.

Marlow stated those funds were already budgeted for other uses with revenue from Walmart.

Councilman Dick Esser clarified the 16-inch water line was not just for the benefit of Walmart but for the entire water system.

Mozilo queried why the motion contained an emergency clause.

Rosenfeld said it was a standard practice to automatically include an emergency clause for WIFA loans.

Trenk asked Marlow if the town was ever going to stop borrowing money for improvements to the water company and if there was an end in sight.

Marlow said the town was trying to do things right the first time around rather than continue to spend money patching things repeatedly as the former owner did.

Vice Mayor Ernie Bunch asked if some of the work wasn’t already completed.

Marlow said it was and that coordinating the water line improvements with the road improvements has saved the town hundreds of thousands in both dollars and traffic interruption.

Town Manager Usama Abujbarah stated Walmart is about 100 percent certain it will start construction next month, in which case, there would be development fees. However, he also stated, under the worst case scenario the town could meet its debt obligations.

Moore spoke during public comment and stated the town’s financial data online was one quarter behind, questioned whether council had current financial data available to assist them with making their decision and how the town was going to repay the $1.4 million loan.

Charles Spitzer said this was the first he’d heard about the $750,000 transfer and stated there are Cave Creek water customers that are not Cave Creek residents that are paying for Cave Creek’s general fund, which he said was “not right either.”

Councilman Steve LaMar moved to approve the resolution and stated the town should not be “penny wise and dollar stupid.” He said completing the necessary infrastructure was one of the steps required to take advantage of commercial development along Carefree Highway.
Bunch, who seconded the motion agreed, as did Bruce.

Mozilo said, “At the risk of being dollar stupid … from a financial perspective, I’m struggling immensely.”

Francia stated he couldn’t remember the last time the word normal was used to describe the economy and said, while this was an expenditure, it was also an asset to the town. “This has been thinking outside the box that has kept things going.”

Council voted unanimously to approve the resolution, with Mozilo and Esser voting yes, “reluctantly.”

Council also voted unanimously to pass all the other action items on the agenda, including an infrastructure reimbursement agreement with Walmart, whereas Walmart would pay for nearly $4 million in infrastructure improvements for which the town will reimburse $1.2 million.

sean lake
Sean Lake

Attorney Sean Lake stated Walmart plans to begin construction within the next few weeks and detailed the costs of the infrastructure improvements it would be making.

Marlow explained that a portion of the $1.2 million the town is agreeing to reimburse Walmart will come from the IGA the town has with Maricopa County Department of Transportation for Cave Creek Road and Carefree Highway intersection improvements.

Council approved a non-exclusive cable television license agreement with COXCOM, Inc. to provide cable services within the town of Cave Creek. While COX representative Michael Stull couldn’t say when that might occur, he indicated it could be within the next few years and getting the license in place was the first step.

Trenk, who moved to pass the second reading of an ordinance that would regulate/ban the use of fireworks within the town limits, stated the ordinance was necessary and thanked Town Attorney Marlene Pontrelli and Rural/Metro Fire Chief John Kraetz.

LaMar encouraged people to contact their legislators about the passage of laws that are dangerous to the fragile desert environment.

Town Clerk Carrie Dyrek presented the first of two public hearings to explain the proposed extension of the Home Rule option as an alternative expenditure limitation, which would then go to voters in March.

The town has operated under Home Rule for the past 12 years, which allows the town to choose an alternative to the state-imposed expenditure limitations set by the legislature in 1980, before the town’s incorporation.

Dyrek explained the state imposed expenditure limitation is based on a formula that considers increases in population and inflation only.

Home Rule allows council to set the expenditure limit through the adoption of its operating budget each year.

In other words, despite the town having the revenue to make certain expenditures, the state imposed limitations would preclude it from doing so, except for limited exclusions if expenditures are made using financing rather than cash.

The second public hearing will be on Nov. 1, when council will vote to adopt a resolution to place Home Rule on the ballot.

Before adjourning Francia asserted, “Never give up your rights to the state.”

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