Things are happening.  As always, full .pdf support is below.  We received a very generous donation from a local community member.  He also has issues with the Town and its practices.  Please support us if you can.

The records request (RFR in Arizona) and FOIA at the federal level is going nowhere fast.  Coming up on eight months.   An attorney with the Ombudsman Office stated:

I have followed up with Ms. Bailey.  In my follow-up, I requested an update on the status of your records, as well as more information about their processes and an explanation of the delay.

We hope they may look into other actions by the Town if they can.

The Case of Transparent Payson vs Town of Payson is going slow.  The Town has requested an extension to file the answer with the appellate court.  We wait.

Rose vs. Town of Payson.  The Superior Court ruled against Ms. Rose. The town has received notice of appeal. The courts show that the matter has been filed. A full copy of the verdict is below.

The Town of Payson has a meeting scheduled for tomorrow.  That was after last week’s special executive session.  A late addition to the agenda is as follows:

F.3. ADDED – Discussion/possible action regarding Resolution No. 3423 captioned as follows: A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF PAYSON, GILA COUNTY, ARIZONA, REPEALING TOWN RESOLUTION NUMBER 3409.  [Added at 10:00 a.m. on 10/22/24]

Resolution 3409 was the decision to purchase bonds.  Will the bond deal be undone?  If so, what are the costs?  We suspect the involved attorneys, underwriters, and others did not spend the time on a whim.  Just in time for Halloween, the bond deal is dead.

The Staff Report reads in part as follows:

The Town of Payson Council has worked with the community and staff for more than 3-years to identify key public infrastructure and improvements desired by the community. The Council took several steps to create funding to build a better Payson and meet the needs of the community, including the authorization to sell excise tax backed bonds.

As a result of the multitude of circumstances outlined in the previous sections of this report, the Town has been placed in the unfortunate position that it cannot realistically sell bonds to fund numerous improvements desired by the community. Staff has prepared for the Town Council’s consideration, an act to rescind resolution 3409, which was passed by the Council on August 21, 2024.

The Town even gave a shout-out to our group!

In August 2019, Town voters approved two voter initiatives (the “2019 Voter Initiatives”) that amended the Town Code to add sections requiring voter approval of certain Town actions.

AND

In May 2023, a lawsuit was filed against the Town by Transparent Payson, a political committee and Jeffrey Aal, a Payson resident, challenging the Town Council’s actions to rescind and repeal the Town Code Sections. A trial was held in April 2024, and in May 2024 the Superior Court of Gila County issued a final, appealable order stating, among other things, that the matters described in the 2019 Voter Initiatives were not legislative in character, and therefore were unlawful measures. Furthermore, the Superior Court found that the Town, as a “general law” municipality under State law, is restricted to the general powers and authority granted by State law, and there is no authority under State law for the Town to refer the matters described in the Repealed Town Code Sections for voter approval. The Superior Court’s order granted a declaratory judgment that the 2019 Voter Initiatives are unenforceable, invalid, of no legal force and effect and therefore the Town Council was within its legal authority to rescind and repeal the Repealed Town Code Sections. The Superior Court also found that the Voter Protection Act applies only to the State Legislature and not to local government councils.

On August 27, 2024, Transparent Payson and Jeffrey Aal filed a Notice of Appeal with the Arizona Court of Appeals to appeal the Superior Courts final judgement.

We are glad we could have a positive impact.  The full documents are below in .pdf.

Also on the agenda is a continuation of the Green Valley II deal.  That reads as follows:

RESOLUTIONS AND ORDINANCES

• Discussion/possible action regarding Resolution No. 3420 captioned as follows: A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF PAYSON, ARIZONA, AUTHORIZING THE LEASING OF CERTAIN REAL PROPERTY BY THE TOWN OF PAYSON, ARIZONA, TO PAYSON REGIONAL HOUSING DEVELOPMENT PURSUANT TO THE AMENDED AND RESTATED GROUND LEASE; AUTHORIZING AND DIRECTING THE MAYOR, TOWN MANAGER AND TOWN ATTORNEY TO PERFORM ALL ACTS NECESSARY TO EFFECTUATE THE AMENDED AND RESTATED GROUND LEASE .

• Discussion/possible action regarding Resolution No. 3421 captioned as follows: A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF PAYSON, ARIZONA, AUTHORIZING THE DEVELOPMENT AGREEMENT BETWEEN THE TOWN OF PAYSON, ARIZONA, AND GREEN VALLEY II OF PAYSON, LLC, RELATED TO THE DEVELOPMENT OF CERTAIN PROPERTY LOCATED IN THE TOWN; AND PROVIDING FOR REPEAL OF CONFLICTING RESOLUTIONS.

The Green Valley project is tied to the development of American Gulch, estimated at $11m plus. It appears the Town has to correct the flood plain for American Gulch, but it has no bond money to do so. The current proposal allows for cost-sharing for a new street. The street and the land lease are in a flood zone.

The floodplain overlay

We recently had the chance to investigate the Green Valley deal more.  It is an outstanding deal for Green Valley.  As you will recall from this post, the TOP acquired the proposed parcel, Parcel Number 304-16-223N, in December 2023 with Resolution 3364.  The parcel is located in an area of proposed town improvement outlined by the Capital Improvement Projects Citizen Advisory Committee (CIPCAC) known as the American Gulch.  The revenue to fund the project was partially established by Ordinance 964 on February 6^th.  The project is to grade and improve a dry gulch subject to flooding.  Funding for the gulch project has not been obtained.  If a bond is issued for funding set against the tax revenue, that may be subject to Proposition 402.  The CIPCAC project estimate is nine million ($9,000,000.00) dollars, as discussed in the Town Memo.  The feasibility study from 2020 may be found at Transparent Payson, reflecting the required engineering and floodplain work.  On March 13^th, 2024, Resolution 3375 was passed to lease land to Payson Regional Housing Development (PRHD), a non-profit entity.

The lease is between Payson Regional Housing Development (PRHD) and the Town of Payson.  The signatory for PRHD is Jacob Swartwood.  A Director of PRHD is former Mayor Craig Swartwood.  PRHD is the manager of Green Valley Apartments of Payson, LLC as found on the Arizona Corporation Commissions filings.

The lease appears to require Parcel Number 304-16-223N to be divided after improvements of $9,000,000.00 PLUS at public expense to the American Gulch area.  The land cannot be developed without public-funded improvements, and the improvement values do not appear to be considered in the lease or purchase price.

The lease appears to allow for the purchase of the property at a predetermined price.  The lease reads as follows:

TENANT’S OPTION TO PURCHASE

Landlord hereby grants to Tenant an option (the “Option”) to purchase the Leased Premises during the term of this Lease, as may be extended (the “Option Term”). The purchase price of the Leased Premises pursuant to the Option shall be an amount equal to $550,000 multiplied by a fraction the numerator of which is the acreage of the Leased Premises and the denominator of which is 5.83. (the “Purchase Price”). The Option may be exercised during the Option Term by Tenant giving written notice of its intent to exercise the Option to Landlord (the “Option Exercise Notice”). Tenant shall close on the acquisition of the Leased Premises (the “Closing”) within sixty (60) days of the issuance of the Option Exercise Notice. At Closing, Landlord shall convey title to the Leased Premises to Tenant by special warranty deed, and will provide such other forms as are required or customary in the state where the Leased Premises is located. Tenant shall pay all costs related to the Closing.

In consideration of the Option, Tenant has paid to Landlord a non-refundable option fee equal to One Hundred Dollars and no/100 ($100.00) (the “Option Fee”), receipt of which is acknowledged by Landlord.

This Option may be transferred to any assignee or other transferee of Tenant’s interest in the Lease, or may be assigned to any managing member or special limited member of Tenant.

That seems like a very very good deal.   The potential for private enrichment via the required floodplain improvements appears significant. Is that…

A violation of the Gift Clause?

You can decide.  Here is what the clause states:

Arizona Constitution Article 9 Section 7 – Gift or loan of credit; subsidies

Section 7.  Neither the state, nor any county, city, Town, municipality, or other subdivision of the state shall ever give or loan its credit in the aid of, or make any donation or grant, by subsidy or otherwise, to any individual, association, or corporation, or become a subscriber to, or a shareholder in, any company or corporation, or become a joint owner with any person, company, or corporation, except as to such ownerships as may accrue to the state by operation or provision of law or as authorized by law solely for investment of the monies in the various funds of the state.

Attorney General Mayes stated precisely what the purpose is on January 16th, 2024.

The purpose of the Gift Clause is to prevent the government from giving away public assets to private businesses.  As such, the Gift Clause prohibits the state from making “any donation or grant, by subsidy or otherwise, to any individual, association, or corporation.”

Is this deal a possible violation?

It would be best for the new Town Council to get in front of this deal. 

We will keep you updated as soon as we can.

Rose vs. Town Of Payson Final Superior Court Judgment:

Resolution 3423:

Staff Report 3423:

Resolution 3420:

Staff Report 3420:

Resolution 3421:

Staff Report 3421:

PowerPoint 3421: