The Town of Payson released a statement on the Rose vs. the Town of Payson suit.  Typically, those statements come from an attorney or media specialist.  We don’t know, but perhaps Town Legal, Mr. Jon Paladini, was responsible.  Mr. Paladini did provide statements to the Payson Roundup.

“Bottom line is that the courts are prohibited from second guessing a legislative body like the council — a slew of cases tell us that. It’s about as close to being frivolous as we’ve seen,” said Paladini.

The Roundup article gave some additional insight into the drafting of the statement.

He noted that this could incur substantial costs for the town, which the town could recoup through a countery claim.

However, Paladini noted that even if the judge throws out the emergency clause, critics will have missed the statutory limit of 30 days they have to gather referendum signatures.

The full Town Statement document is below in .pdf.  The Town has a long history of attempted intimidation.  Part of the release states:

Unfortunately, the lawsuit has necessitated its inclusion in the Town’s financial statements and disclosures about risk.  It is possible that the filing of this suit will increase cost of the sale of the bonds.  These potential cost increases could amount to significant damages.  The Town Council has a fiduciary responsibility to protect the taxpayer’s funds, and we will evaluate the potential for a counterclaim against the Plaintiff as this action proceeds.

The Town may file a countersuit against Ms. Rose for the costs associated with the increased purchase price of the bond issuance if it goes forward.  They have a “fiduciary duty” to do so.  If we will discuss duties, we should likely discuss them all.

• A fiduciary duty to not go over budget on a splash pad by 51%?  No.
• A fiduciary duty to maintain current facilities and roads?   No.
• A fiduciary duty not to enter into a lease on land you do not control?   No.
• A fiduciary duty not to abuse the “emergency clause” to preclude a referendum?  We will see.
• A fiduciary duty to threaten citizens who have the audacity to stand up?  It appears so.

A new Council will be seated later this year, deciding the future course.

In the meantime, roar, Paper Tiger. ROAR!

We encouraged people to read the Goldwater Institute filings of the Complaint and the Application for a Temporary Restraining Order (TRO).   The documents may be found here.   The basis of the filings is that there was no emergency.   That position is supported in the documents from the Council’s statements.  Paragraph 23, page 4, line 10 of the Complaint:

Several Town Council members indicated during the August 21, 2024 meeting that they wanted the resolution enacted before the upcoming change in the Town Council’s composition as a result of a close primary election.  See, e.g., id. at 2:35:45– 2:26:00 (Councilmember Schinstock) (“I did not hear any vision from the incoming council.  They focused on criticizing our decision, and I really have no idea how they plan to move Payson forward.”); id. at 2:40:57 (“It may take years to recover the momentum if we don’t pull the trigger.”).

The TRO has the same information on page 3, line 20 through page 4, line 7:

• “It may take years to recover the momentum if we don’t pull the trigger.” Council Meeting at 2:35:45–2:26:00; Compl. ¶ 23 (Councilmember Schinstock).

• “I did not hear any vision from the incoming Council. They focused on criticizing our decision, and I really have no idea how they plan to move Payson forward.” Council Meeting at 2:40:57 (Councilmember Schinstock).

They also noted that they had been trying to enact similar bond measures and debt-funded municipal projects (particularly a recreation center and swimming pool) for several years, but that those projects had failed due to the political process:

• Now we’re making a third attempt to bring this community an indoor pool, and once again, the election results have put this project in jeopardy.”). Council Meeting at 2:27:10–2:27:30; Compl. ¶ 25 (Councilmember Schinstock).
• “We have endured too much political and personal criticism.” Id. at 2:40:55.
• “It’s been out there on the table for a long time, and a battle to get to this point.”

Council Meeting at 2:49:50–2:50:05; Compl. ¶ 24 (Councilmember Flaherty).

TRO Page 6, line 23 through page 7, line 3:

In fact, Town Council members repeatedly stated during the August 21, 2024 meeting that the bond measure and associated municipal projects have been foreseen and contemplated for several years, and that they are not the result of sudden or emergency circumstances.  Compl. ¶ 24; see, e.g., Council Meeting at 2:24:22–2:2435 (Councilmember Nossek) (noting the decision followed “over three years of open meetings, countless hours of study, discussion, and a great deal of citizen input.  This decision is not being rushed into by any stretch of the imagination.”); id. at 2:49:50– 2:50:05 (Councilmember Flaherty) (“What we’re discussing is nothing new.  It’s not rushed.  It’s been out there on the table for a long time … .”).

The issue of Rose vs. the Town of Payson concerns using emergency resolutions/ordinances.  From April 12th, 2023, to August 21st, 2024, the Town used an “emergency” five times.  It is not coincidental that the topics subject to an emergency declaration were not well received.  We have repeatedly discussed that an emergency resolution/ordinance precludes a referendum.

For the first two, the emergency was rising interest rates.  The most recent? Lowering interest rates. That seems circular.  A lowering tide is the remedy if a rising tide is an emergency.  A remedy is a solution to a prior emergency.  How can both stated reasons be valid?

So, what constitutes an emergency?  The League of Arizona Towns and Cities provides example language.  The standard clause reads as follows:

“Whereas, it is necessary for the preservation* of the peace, health and safety of the City/Town of , Arizona, an emergency is declared to exist, and this ordinance shall become immediately operative and in force from and after the date of posting hereof.”

* Emphasis added.

Sometimes, emergencies include the word “immediate.” The Goldwater Institute fillings define it as found on the TRO, page 6, line 14:

 ‘An unforeseen combination of circumstances which calls for immediate action.’” Garvey v. Trew, 64 Ariz. 342, 354 (1946) (quoting Webster’s New Int’l Dict., 2d ed.).  That does not apply here.

New construction does not require immediate action.  Damage to an existing structure is “reconstruction,” and that may be an emergency.  “Unforeseen” does not include a multiple-year process.

Mr. Scott Nossek elected to take to social media via Nextdoor to discuss the suit further.  He had an issue with our appearance on KMOG found here.  Mr. Nossek is a current sitting Town Council Member who recently won his reelection effort for an additional four years. We again congratulate him on his victory. We are grateful for Mr. Nossek’s willingness to engage various public members about his decision. If that thread remains intact, it may be found here.  During that online discussion, Mr. Nossek confirmed the allegations asserted by the Rose vs. Town of Payson suit.  Questions were asked.

• Does a long-standing political stalemate constitute an emergency?
• Does new construction qualify as a health benefit to “preserve?”
• Is political expediency an appropriate use of the emergency provision?

For Mr. Nossek, the answer is yes. 

You may note Mr. Nossek’s attempts to redefine an “emergency resolution/ordinance” as an “ASAP resolution/ordinance.”  This is not the first time we have seen that definition locally.  We have heard of an “urgency clause.”  A discussion with changing definitions to justify actions is nonproductive.  We see that at the national level on a host of issues.  It struck us that the line of reasoning came from somewhere.  None of us wake up one day with the answers to these questions.  We all draw our conclusions from the information we are provided.  Independent research, professionals, or other avenues come into play.  That input will also be sought in a professional environment, with access to qualified counsel.

Experience teaches us that professionals, or anybody paid for an opinion or conclusion, come in two flavors: those who provide the answer and those who provide the answer you want.  The latter is nothing more than a “yes man.”  The end user is ultimately responsible for asking the right question(s) and selecting the right person.

These two questions are vastly different:

• Is this legal?
• Can you make this legal?

Town Legal, Mr. Jon Paladini, approved each use of the emergency ordinance.  Mr. Paladini and his firm, Pierce Coleman, completed various analyses of various issues, including the application of the Voter Protection Act in our matter,  that were used in support of the Council’s actions.  In addition to Mr. Paladini, the Town Council has had access and guidance from Greenberg Traurig and Stifel, who have been advising on these issues since early 2023.  All are respected firms.  Was the advice on emergency ordinances good advice or counsel from the various firms?  Was it bad?  That question will be resolved by the Rose vs. Town of Payson suit.

There are concerns about other points of advice from Mr. Paladini.

During the August 21^st meeting, in defense of the bond process, Mr. Paladini stated that professional services, such as bond issuance, cannot be put to bid by law.  That was surprising news to points of contact in the bond market and other professional service providers.  Was that good advice or counsel? Was it bad?

Additionally, Mr. Paladini approved Resolution 3378, allowing the Council to lease land they did not own or control. We do not know how that occurred. You cannot lease our house, and we cannot lease yours. We discussed our concern here.

The proposed parcel, Parcel Number 304-02-015X, is not owned by the TOP.  On March 27th, 2024, Resolution 3378 was passed with an OPTION to lease land to Danco Communities.  Payson Land 30, LLC currently owns the land.  Should the LIHTC be approved, the TOP must acquire the land to fulfill the lease option.

Danco did not receive the tax credits, so that question never needed resolution.  Was that good advice or counsel?  Was it bad?  Was that dodging a bullet?

From Mr. Nossek’s social media postings, it appears Mr. Paladini has failed to provide his clients with the first rule of (defense) fight club.  Do not talk about (defense) fight club.  Thank you again, Mr. Nossek, for your willingness to provide additional insight.

If the new Council wishes to succeed, it may be time to discharge Mr. Paladini.

We hope they ask the right questions of future Town Legal.  Something tells us they will.

Goodbye, Paper Tiger.

Town of Payson Statement of 09/12/24 on Rose vs. The Town of Payson