The mayor and town council’s approval of the April 6, 2015 Resolution of intent to form a Revitalization District was so poorly written that it was revoked by Mark Stapp on behalf of the Petitioners. In its place, an amended Resolution of intent to form a Revitalization District was approved by the mayor and town council on April 20, 2015.[i] However, it, too, was revoked due to the failure by Mark Stapp to obtain foreign corporation status for his three Nevada-based corporations before petitioning for Revitalization District approval. A search of the Arizona Corporation Commission website evidences that Mark Stapp is in the process of obtaining foreign corporation status approval from the Arizona Corporation Commission. But, is foreign corporation status all that Mark Stapp is required to comply with? No.
#1. Is foreign corporation status all that is required in the Revitalization District approval process? No. Foreign corporation status is not sufficient Arizona Corporation Commission authority to transact business in Arizona as a Revitalization District.
As Nevada-based corporations, the Petitioners must not only file for and be granted foreign corporation status, but because the Petitioners are seeking foreign corporation status for the purpose of forming a Revitalization District in Arizona, the Arizona Corporation Commission’s foreign corporation status approval is constitutionally-restricted to whether or not the laws in the state of Nevada authorize the forming of Revitalization Districts in Nevada by Petitioners.[ii]
There is another mandatory requirement that has not yet been addressed by Mark Stapp, the mayor, or members of town council. Under A.R.S. Title 48 “Special Taxing Districts” the county board of supervisors has the absolute decision-making authority in the approval or denial of a Revitalization District petition. This mandatory provision can be read in its entirety below.[iii] This mandatory provision is not recited in the Revitalization Districts statute,[iv] yet its compliance by any Petitioner(s) seeking to form a Revitalization District is mandatory, not discretionary.
Does this mandatory statutory provision render any Revitalization District decision made by a city or town council null and void? Is a decision by a city or town council in a Revitalization District matter allowed or even required? Under this mandatory statutory requirement is a Revitalization District petition considered a “de-annexation” and therefore additionally subject to compliance with A.R.S. Title 9, Ch. 4, Art. 7, 9-471.02? At what stage of the petition process is the county board of supervisors’ jurisdiction and review of a Revitalization District petition required? Or, is the intent of this statutory provision only to afford the petitioner with an added benefit of “judicial review” if a Revitalization District petition is denied by a city or town council? What constitutional or other authority empowers a county board of supervisors to intercede in and/or overturn the legislative decisions made by a city or town council? In the exercise of Due Process, when, by whom, and by what method are the citizens of a city or town to be notified of the county board of supervisors’ Revitalization District meeting? Where is the meeting to be held? In Phoenix or in Cave Creek? Which Revitalization District decision starts the clock ticking under the referendum process: the city or town council’s decision, or the county board of supervisors’ decision?
These along with a host of other legal issues arise due to this mandatory provision, and all of these legal issues require an answer before anyone’s petition for a Revitalization District can be considered or approved by the mayor and members of Cave Creek’s town council, or by the county board of supervisors.
A.R.S. 48-271. Board of supervisors authority to approve or deny formation of special district A. Notwithstanding any provision of law for the formation of a special taxing district, the county board of supervisors has the absolute authority to deny the formation, other than under chapter 4, 11, 12, 17, 18, 19 or 22 of this title, of a special district in that county, if sufficient grounds exist for such formation denial. Nothing in this subsection shall be deemed to limit in any way judicial review of a decision by the board of supervisors in denying the formation of a special taxing district.
B. For purposes of this section, a special district is any entity proposed to be established on or after January 1, 1989 with substantially the following characteristics:
1. The status of a political subdivision of this state vested with the rights, privileges and immunities of a municipality to the extent consistent with its stated purposes.
2. A limited purpose as stated in its authorizing statutes.
3. An independently elected governing body.
4. Exterior boundaries within or coterminous with a single county.
5. The power to impose and collect taxes.
6. Perpetual succession of its governmental existence, purpose, powers and governing body, subject to a prescribed dissolution procedure.
7. Corporate existence separate and apart from any other unit of government.
#2 Is the Planning Commission required to review the Cahava Springs Revitalization District petition before a Resolution of intent to form a Revitalization District can be considered or approved by the mayor and town council? Yes. The Planning Commission is vested with oversight in matters related to planning, zoning, etc. This is the reason the Planning Commission is the town authority vested under Arizona law with the drafting of the town’s 2015 General Plan.
The mayor and town council’s approval of Cahava Springs Revitalization District will officially reduce the size of the town of Cave Creek. Therefore, because approval of the Revitalization District will reduce the size of the town, present and future planning of the town will be affected, thus invoking and requiring the Planning Commission’s review of the Revitalization District petition and the forwarding of their recommendation to the mayor and town council before the mayor and town council’s approval of any Resolution of intent to form a Revitalization District.
It is unknown why the mayor has deemed the Planning Commission’s review not to be a required review.
In compliance with #1 above, at what stage of the Revitalization District petition process is the Planning Commission required to submit its recommendation to the county board of supervisors?
#3 Do the town’s Articles of Incorporation authorize the mayor and members of town council to reduce the corporate size of Cave Creek? Unknown. No authority allowing the reduction in size of an incorporated municipality could be found to exist except as a process for de-annexation. A.R.S. 9-471.02.
The corporate size of Cave Creek will officially be reduced once the mayor and members of town council approve the formation of a town within our town, i.e., a Revitalization District. Upon approval of any Resolution, for taxing and other purposes, the town of Cave Creek and the Cahava Springs Revitalization District are required to file official amended land surveys for recording with the appropriate state and county offices. The reduction in the size of the town of Cave Creek will be commensurate with the official land survey boundaries for the proposed Cahava Springs Revitalization District.
Recording of the town’s and the Revitalization District’s boundaries with the Tax Assessor’s Office and other State offices voids all property taxing authority by the town of Cave Creek on property(s) inside the Revitalization District’s borders. No property owners or future residents inside the borders of Cahava Springs Revitalization District will be required to pay a town of Cave Creek property tax as long as the Revitalization District remains in existence.
The existence of a Revitalization District is perpetual -- forever.
#4. If a Revitalization District petition is approved, will the citizens of Cave Creek be required to pay a property tax or assessment(s) on municipal services in order to pay the town’s proportionate share of the infrastructure installed outside the borders of Cahava Springs Revitalization District? Yes, unless the town has the required funds without imposing a property tax or assessment.
In fact, the Revitalization Districts statute requires that the Resolution of intent to form a Revitalization District approved by a municipality (Cave Creek) contain a tax levying provision declaring that approval may result in either an assessment on municipal services or that a property tax be levied on the citizens of the municipality (i.e. Cave Creek citizens).[v] In adherence to this mandatory statutory language, the two prior Resolutions approved by the mayor and town council contained this statutory provision.[vi]
Unless the town has the required funds without imposing a property tax or assessment(s) a property tax or assessment(s) will be required to give the town access to funds to pay the town’s required proportionate share of infrastructure costs. The Revitalization Districts statute (1) prohibits a Revitalization District from paying all of the infrastructure costs installed outside the Revitalization District’s borders, or, (2) it requires that the town of Cave Creek reimburse the Revitalization District for the town’s proportionate share of any infrastructure benefit the town gains from the infrastructure paid for by the Revitalization District and installed outside the Revitalization District’s borders.[vii] Mark Stapp has stated that all of the infrastructure will be installed outside the borders of Cahava Springs Revitalization District and that all of the infrastructure costs --- $20-million dollars --- will be paid by the Revitalization District.
A municipal assessment(s) or a property tax will be necessary to comply with the law and pay whatever is judged to be the town’s proportionate share of this $20-million dollar infrastructure expense. As stated above, in addition to the town paying its proportionate share of the installation costs, the statute also requires the town to provide a funding source to pay for the long-term operation and maintenance costs of the infrastructure installed outside the borders of the Revitalization District. This will require funding through municipal assessment(s) or a property tax.
How is a proportionate share determined? The “proportionate share” is determined by calculating the benefit of such improvements to the town and to Cahava Springs Revitalization District. The Revitalization Districts statute gives this decision-making authority to the 3-member Board of the Revitalization District.[viii] However, in the event of foreclosure or bond default by Cahava Springs Revitalization District, if the bond holders or the Bankruptcy Trustee finds the town’s proportionate share to be deficient, the 3-member Board’s proportionate share decision could be challenged exposing the town to as much as 100% of the $20-million dollars in infrastructure costs.
Any proportionate share computation should be based on the following facts: There are 230 home sites within the proposed Cahava Springs Revitalization District borders. Under the town’s Open Space Agreements there are 2,515 homes required to be built within Cave Creek’s borders. The town will gain an infrastructure benefit for these 2,515 homes as a result of the infrastructure installed outside the Revitalization Districts borders and paid for by Cahava Springs Revitalization District. Under this scenario, the infrastructure benefit to the town, and therefore its proportionate share, is at least ten times greater than the proportionate share of the infrastructure benefit to Cahava Springs Revitalization District.[ix]
A property tax must be approved by Cave Creek citizens. However, the mayor and town council members can impose assessment(s) on municipal services to pay the town’s proportionate share without obtaining the approval of Cave Creek citizens. The 300% water rate increase is an example of an assessment imposed on Cave Creek citizens by the mayor and town council.
If a property tax should be approved by Cave Creek residents to pay for the town’s proportionate share of infrastructure costs, no Cahava Springs Revitalization District resident will be required to pay this property tax as long as the Revitalization District remains in existence. The existence of a Revitalization District is perpetual.
In full disclosure, the two prior and now void Resolutions contained a provision declaring that the town will not be responsible for payment of infrastructure costs. Unlike the mandatory statutory provision requiring notice of the likelihood of a property tax or assessment be contained in any Resolution, this non-payment provision is not a mandatory statutory provision, nor is it based on any other statutory requirements. This provision in the Resolutions is unenforceable and wholly contrary to all of the legal requirements that notice of the likelihood of a property tax or assessment be given to citizens.
Without invoking the authority in #5 below, before approval of (yet) another Resolution of intent to form a Revitalization District, the mayor and members of town council should publicly explain where and how the required funds to pay the town’s proportionate share of infrastructure costs and the long-term maintenance and operation costs of the infrastructure will be obtained without an assessment(s) or property tax.
#5. Are the mayor and town council members authorized to order payment of the town’s proportionate share – including bond service costs -- without citizen approval? Yes. The Revitalization Districts statute allows the mayor and town council members to summarily participate in the payment of the bond debt service. The definition of “summarily” means “without notice; precipitately.” The entire statutory section reads: 48-6811. Participation by Municipality. The governing body of the municipality, by resolution, may summarily order the participation by the municipality in the costs of any public infrastructure purpose, including the payment of bond debt service.
The “municipality” referenced in this provision is Cave Creek as Cahava Springs Revitalization District is not an incorporated city or town, does not meet the criteria to be an incorporated city or town, and is not a municipal corporation.
#6. Is a Revitalization District a municipality the same as every other city or town in Arizona? No. The proposed Cahava Springs Revitalization District fails to meet the constitutional requirements for forming a city or town. The Arizona Constitution outlines the requirements for forming a city or town. Those requirements are contained in Article 13 “Municipal Corporations,” Section 2 of the Arizona Constitution. Among its many requirements, section 2 mandates that to form a city or town the proposed municipality must contain a population of more than 3,500[x] residents, and that 14 qualified electors from the proposed municipality compose the board of freeholders.
Despite the constitutional deficiency of a Revitalization District, the Arizona legislature has endowed these “Special Taxing Districts” with quasi-municipal authority to levy taxes. Taxing authority is constitutionally-restricted to incorporated cities, towns, or municipal corporations, of which Cahava Springs Revitalization District is not.
NOTE: There are indications that a Revitalization District would qualify as a “franchise.” However, under the Arizona Constitution, “Municipal Corporations,” Article 13, Sec. 4, approval as a franchise would be decided by the residents of Cave Creek, not the mayor and members of town council.[xi] See, also #7 below.
#7. Does the Arizona Constitution authorize a Revitalization District with tax levying authority? No. To possess the qualifying criteria to be a tax levying authority the entity must be a constitutionally-created incorporated town or city, or the entity must be a municipal corporation. The Arizona Constitution authorizes tax levying authority to incorporated cities, towns, and municipal corporations only. [xii] The statutory restriction on this tax levying authorization is evidenced in A.R.S. Title 9, Ch. 1, Art 3, 9-137. Powers and duties. “Cities and towns incorporated pursuant to the provisions of this article shall have all the powers, duties, rights and privileges granted to incorporated cities and towns under the laws and constitution of this state.
The Petitioners for Cahava Springs Revitalization District are for-profit corporations, not municipal corporations, and are not a constitutionally-created incorporated city or town.
Without being an incorporated city or town, or a municipal corporation, the Petitioners for Cahava Springs Revitalization District cannot levy or collect taxes or assessments. And, without tax levying authority, the funding mechanism necessary for the Petitioners of the Revitalization District to repay the $20-million dollars in bond money to its bond holders does not exist. See, also #6 above.
#8. Are Cave Creek residents allowed to submit oral or written comments for the Formation Hearing? This answer depends on the mayor. However, if the mayor were to recognize that there are others besides Mark Stapp who have a property interest inside the borders of Cahava Springs Revitalization District, it would mean at least a 6-month delay in the council’s approval of any Resolution of intent to form a Revitalization District. And by all appearances, the mayor and members of town council are working toward an expedited approval of the Revitalization District.
Section (B) of A.R.S. 48-6803 Notice states that notice of the Formation Hearing must be given to “all other persons claiming an interest in such property who have filed a written request for a copy of the notice within the six months preceding or at any time following the adoption of the resolution of intent to form the district.”
To date, the mayor and members of town council have never challenged Mark Stapp’s claim that he is sole owner of the property inside the proposed Cahava Springs Revitalization District and they have failed or refused to recognize that others have a property interest inside the borders of Cahava Springs Revitalization District. The mayor and members of town council have already approved two Resolutions in reliance of Mark Stapp’s claim as sole owner in total disregard of the property interest of Cave Creek citizens and an independent, third-party non-profit.
Those other persons with a property interest are the citizens of Cave Creek and an unknown independent, third-party non-profit Arizona corporation.
The Revitalization District statute states that persons claiming a property interest within the borders of the proposed Revitalization District can submit oral or written comments for the Formation Hearing. Under A.R.S. Title 9, Ch. 2, Art. 3, 9-254. Title to streets[xiii] the citizens of Cave Creek have had a property interest within the borders of Cahava Springs Revitalization District since 2006 when the Final Plat for the Cahava Springs development was approved. In addition, and as evidenced in #9 below, the April 25, 2005 Pre-Annexation and Development Agreement Between Town of Cave Creek and Apache Springs Land, L.L.C. (“Development Agreement”) also gives the citizens of Cave Creek and an independent, third-party non-profit a property interest inside the border of Cahava Springs Revitalization District.
POLITICAL NOTE: A.R.S. 48-6803(B) states that the notice of the Formation Hearing can be published in the “official newspaper of the municipality, if there is one…” The May 18, 2015 town council meeting agenda contained an agenda item asking the town to declare the Sonoran News to be the “official newspaper of the municipality” (Cave Creek). No decision was made on this agenda item at the May 18th meeting. The matter was continued to negotiate a lower cost for publishing legal notices in the Sonoran News than what Don Sorchych stated he would be willing to charge.
#9. Are there persons other than Mark Stapp who can claim to have a property interest within the boundaries of the proposed Cahava Springs Revitalization District? Yes. Those persons are the citizens of Cave Creek and an unknown, independent, third-party non-profit Arizona corporation.
The April 25, 2005 Pre-Annexation and Development Agreement Between Town of Cave Creek and Apache Springs Land, L.L.C. (“Development Agreement”) gives the town (i.e. Cave Creek citizens) and/or an independent third-party non-profit corporation a property interest within the proposed Cahava Springs Revitalization District borders. If the property interest of Cave Creek citizens and the independent, third-party non-profit Arizona corporation has not been abridged by the mayor, town council, staff, or Mark Stapp via any of his multiple corporate entities, the Cahava Springs Revitalization District petition must be halted until these “other persons” have been afforded Due Process.
Under the right to Due Process, the citizens of Cave Creek and the independent, third-party non-profit must be given six months’ notice[xiv] of the mayor and town council’s intent to form a Revitalization District before the mayor and town council can approve any Resolution of intent to form a Revitalization District.
The Development Agreement clearly states that ownership of the Open Space system within the now proposed Cahava Springs Revitalization District is required to be titled and under the control of either the town or an independent, third-party, non-profit. Therefore, either the town or this independent, non-profit third-party can lawfully assert to having a property interest within the proposed Cahava Springs Revitalization District’s borders by means of the Open Space system.
The Development Agreement contains the following pertinent trail and open space provisions:
Trail System within Cahava Springs Revitalization District: At pg. 7, of the Development Agreement, section 3.5 Trails it states that trail “easements shall remain privately owned and maintained, but shall be available to the public” or that trails existing as public trails “shall be publicly owned and maintained.” Mark Stapp has claimed that 3 ½ miles of trails exist within the borders of the proposed Cahava Springs Revitalization District. Are these trails “privately owned” or “publicly owned”? If “publicly owned,” are the trails are owned by Cave Creek or Maricopa County? Have the requisite deeds been recorded in the Official Records of Maricopa County? If so, when and what is the recording number(s)? If “privately owned” are the trails recorded as easements or have other protections been recorded to assure continued public access to the trail system after approval of the Cahava Springs Revitalization District? If so, where is a copy of these recorded easements?
Open Space System within Cahava Springs Revitalization District: At pg. 7, of the Development Agreement, section 3.6 Open Space, it states that “…the Owner agrees that within ninety (90) days of preliminary plat approval by the Town for the entire Property, the Owner shall voluntarily and without consideration convey at least 175 acres (“the Preserved Open Space”) of the Town Property to, at its sole discretion, either the Town or an independent, non-profit, third-party capable of managing the Preserved Open Space…”
Official records indicate that Final Plat approval was recorded in the Official Records of Maricopa County in 2006. Official records also indicate that the Open Space System was transferred to one of Mark Stapp’s non-profit corporations, Cahava Springs Conservancy. This transfer of the Open Space system to Mark Stapp via one of his corporations violates the terms of the Development Agreement. The Development Agreement requires that the Open Space system become either town property, or that it be placed in the possession of an independent, non-profit third-party. Any possession or transfer of the Open Space system to Mark Stapp, or that includes any of Mark Stapp’s multiple corporations, does not comply with the agreed upon terms of the Development Agreement.
A search on the Arizona Corporation Commission website indicates that Cahava Springs Conservancy, the non-profit corporation to whom possession of the Open Space was transferred, was dissolved and has not been a corporation in good standing in Arizona since May, 2013. See also #11. What entity is in possession of the Open Space system?
Was there ever any deed(s) recorded in the Official Records of Maricopa County giving the Open Space system land to the Cahava Springs Conservancy? If so, what is the recording number? What independent, third-party non-profit entity now has recorded title and possession of the Open Space system land? Is the deed giving this entity ownership of the Open Space system recorded in the Official Records of Maricopa County? If so, what is the recording number?
#10. Have the original terms of the April 25, 2005 “Pre-Annexation And Development Agreement Between Town Of Cave Creek And Apache Springs Land, L.L.C.,” been officially amended or extended? Unknown. The claim by the mayor and Mark Stapp and his legal counsel the law firm of Gammage and Burnham, is that an extension was signed and that the 2006 Final Plat was amended.
According to records, the Final Plat was approved in 2006. There was an amendment to the Final Plat during a town council meeting on October 6, 2014. It is unknown whether the Final Plat amendment approved by the town council on October 6, 2014 was recorded in the Official Records of Maricopa County within 10 days of the executed amendment in accordance with p. 14, section 5.16 of the Development Agreement.
The original April 25, 2005 “Pre-Annexation And Development Agreement Between Town Of Cave Creek And Apache Springs Land, L.L.C.” was for a period of ten (10) years. Absent evidence of an extension signed by all authorized parties, the Development Agreement expired on April 25, 2015.
A search of every town council meeting agenda item from April 25, 2005 to the present date does not evidence any extension(s) of the Development Agreement being placed on a town council meeting agenda for council approval and mayor signature.[xv] As a budget item, town council approval at a town council meeting is required. At p. 14, section 5.16 of the Development Agreement it states that any amendments or extensions are required to be recorded in the Official Records of Maricopa County within 10 days of the executed extension(s) or amendment(s).
Where is the documentation evidencing the dates on the recording of the amendment(s) and extension(s)?
#11. Who were the parties authorized to sign an amendment or extension of the April 25, 2005 “Pre-Annexation And Development Agreement Between Town Of Cave Creek And Apache Springs Land, L.L.C.” For the town of Cave Creek, the authorized signer would be the mayor. If any amendment(s) or extension(s) of the Development Agreement was signed after May 12, 2011, the only parties authorized to sign on behalf of Apache Springs Land, L.L.C., are its managers John May, Jeffrey Peoetsch, and Tom Javits. As of May 12, 2011 Mark Stapp is designated as a “Member” of Apache Springs Land L.L.C., not as a “Managing Member” as he claimed in 2005.
Of further note is the fact that, Mark Stapp signed the May 12, 2011 amendment to the Apache Springs Land, L.L.C. Articles of Incorporation as “MS Stapp Investments, Inc.” However, the Arizona Corporation Commission website reflects that “MS Stapp Investments, Inc.,” has not been a corporation in good standing in Arizona since August 11, 2009. See, also #9 above.
This article does not begin to shed light on all of the legal issues and questions related to Revitalization Districts. As decisions continue to be made by the mayor and members of town council, the legal issues and questions surrounding those decisions will be researched and appear in further articles.
Watch this space. Be informed. Stay informed. Get involved. Demand the truth.
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Janelle Smith-Haff
[email protected]
Tuesday, May 26, 2015
[i] Resolution No. 2015-13.
[ii]Arizona Constitution, Art. 14, Sec. 5. Foreign corporations; transaction of business. No corporation organized outside of the limits of this state shall be allowed to transact business within this state on more favorable conditions than are prescribed by law for similar corporations organized under the laws of this state; and no foreign corporation shall be permitted to transact business within this state unless said foreign corporation is by the laws of the country, state, or territory under which it is formed permitted to transact a like business in such country, state, or territory.
[iii]Other referenced citations in this article appear in these endnotes.
[iv] A.R.S. Title 48, Ch. 39, Art. 1.
[v] A.R.S. Title 48, Ch. 39, Art. 1, 48-6802 Resolution of intent; eligible participants; district board. (6) That formation of the district may result in the levy of taxes or assessments to pay the costs of improvements constructed by the district and for their operation and maintenance.
[vi] Resolution No. 2015-13, Sec. 2(G): “The formation of the District will result in the levy of special assessments or ad valorem taxes to pay costs related to: (i) the formation and operation of the District; (ii) infrastructure improvements financed, constructed or acquired by the District; and (iii [sic]) operation and maintenance of such infrastructure improvements.”
[vii] A.R.S. Title 48, Ch. 39, Art. 1, 48-6801 Definitions. 8. “Infrastructure.”
[viii] The mayor and town council, not Mark Stapp, appoint the 3-member Board of the Revitalization District.
[ix] Some could rightly argue that certain Cave Creek residents will immediately benefit from the infrastructure installation whereas Cahava Springs Revitalization District will receive no infrastructure benefit because no infrastructure will be installed inside the border of Cahava Springs Revitalization District and there are no residents. Acceptance of this argument exposes the town to paying 100% of the $20-million dollars in infrastructure costs.
[x] “2. Charter; preparation and proposal by board of freeholders; ratification and approval; amendment Any city containing, now or hereafter, a population of more than three thousand five hundred may frame a charter for its own government consistent with, and subject to, the Constitution and the laws of the state, in the following manner: A board of freeholders composed of fourteen qualified electors of said city may be elected at large by the qualified electors thereof, at a general or special election, whose duty it shall be, within ninety days after such election, to prepare and propose a charter for such city. Such proposed charter shall be signed in duplicate by the members of such board, or a majority of them, and filed, one copy of said proposed charter with the chief executive officer of such city and the other with the county recorder of the county in which said city shall be situated. Such proposed charter shall then be published in one or more newspapers published, and of general circulation, within said city for at least twenty-one days if in a daily paper, or in three consecutive issues if in a weekly paper, and the first publication shall be made within twenty days after the completion of the proposed charter. Within thirty days, and not earlier than twenty days, after such publication, said proposed charter shall be submitted to the vote of the qualified electors of said city at a general or special election. If a majority of such qualified electors voting thereon shall ratify such proposed charter, it shall thereupon be submitted to the governor for his approval, and the governor shall approve it if it shall not be in conflict with this Constitution or with the laws of the state. Upon such approval said charter shall become the organic law of such city and supersede any charter then existing (and all amendments thereto), and all ordinances inconsistent with said new charter. A copy of such charter, certified by the chief executive officer, and authenticated by the seal, of such city, together with a statement similarly certified and authenticated setting forth the submission of such charter to the electors and its ratification by them, shall, after the approval of such charter by the governor, be made in duplicate and filed, one copy in the office of the secretary of state and the other in the archives of the city after being recorded in the office of said county recorder. Thereafter all courts shall take judicial notice of said charter. The charter so ratified may be amended by amendments proposed and submitted by the legislative authority of the city to the qualified electors thereof (or by petition as hereinafter provided), at a general or special election, and ratified by a majority of the qualified electors voting thereon and approved by the governor as herein provided for the approval of the charter.”
[xi] Arizona Constitution, Article 13, Sec. 4. Franchises; approval of electors; term “No municipal corporation shall ever grant, extend, or renew a franchise without the approval of a majority of the qualified electors residing within its corporate limits who shall vote thereon at a general or special election…”
[xii]Arizona Constitution, Article 9, Sec. 6: 6. Local assessments and taxes Incorporated cities, towns, and villages may be vested by law with power to make local improvements by special assessments, or by special taxation of property benefited. For all corporate purposes, all municipal corporations may be vested with authority to assess and collect taxes.
[xiii] A.R.S. Title 9, Ch. 2, Art. 3, 9-254. Title to streets Upon filing a map or plat, the fee of the streets, alleys, avenues, highways, parks and other parcels of ground reserved therein to the use of the public vests in the town, in trust, for the uses therein expressed. If the town is not incorporated, then the fee vests in the county until the town becomes incorporated.
[xiv] A.R.S. Title 48, Ch. 39, 48-6803. Notice. Section (B).
[xv] There was a town council meeting on October 6, 2014 regarding Final Plat amendment approval for Cahava Springs but this meeting did not involve an extension of the original Development Agreement.
#1. Is foreign corporation status all that is required in the Revitalization District approval process? No. Foreign corporation status is not sufficient Arizona Corporation Commission authority to transact business in Arizona as a Revitalization District.
As Nevada-based corporations, the Petitioners must not only file for and be granted foreign corporation status, but because the Petitioners are seeking foreign corporation status for the purpose of forming a Revitalization District in Arizona, the Arizona Corporation Commission’s foreign corporation status approval is constitutionally-restricted to whether or not the laws in the state of Nevada authorize the forming of Revitalization Districts in Nevada by Petitioners.[ii]
There is another mandatory requirement that has not yet been addressed by Mark Stapp, the mayor, or members of town council. Under A.R.S. Title 48 “Special Taxing Districts” the county board of supervisors has the absolute decision-making authority in the approval or denial of a Revitalization District petition. This mandatory provision can be read in its entirety below.[iii] This mandatory provision is not recited in the Revitalization Districts statute,[iv] yet its compliance by any Petitioner(s) seeking to form a Revitalization District is mandatory, not discretionary.
Does this mandatory statutory provision render any Revitalization District decision made by a city or town council null and void? Is a decision by a city or town council in a Revitalization District matter allowed or even required? Under this mandatory statutory requirement is a Revitalization District petition considered a “de-annexation” and therefore additionally subject to compliance with A.R.S. Title 9, Ch. 4, Art. 7, 9-471.02? At what stage of the petition process is the county board of supervisors’ jurisdiction and review of a Revitalization District petition required? Or, is the intent of this statutory provision only to afford the petitioner with an added benefit of “judicial review” if a Revitalization District petition is denied by a city or town council? What constitutional or other authority empowers a county board of supervisors to intercede in and/or overturn the legislative decisions made by a city or town council? In the exercise of Due Process, when, by whom, and by what method are the citizens of a city or town to be notified of the county board of supervisors’ Revitalization District meeting? Where is the meeting to be held? In Phoenix or in Cave Creek? Which Revitalization District decision starts the clock ticking under the referendum process: the city or town council’s decision, or the county board of supervisors’ decision?
These along with a host of other legal issues arise due to this mandatory provision, and all of these legal issues require an answer before anyone’s petition for a Revitalization District can be considered or approved by the mayor and members of Cave Creek’s town council, or by the county board of supervisors.
A.R.S. 48-271. Board of supervisors authority to approve or deny formation of special district A. Notwithstanding any provision of law for the formation of a special taxing district, the county board of supervisors has the absolute authority to deny the formation, other than under chapter 4, 11, 12, 17, 18, 19 or 22 of this title, of a special district in that county, if sufficient grounds exist for such formation denial. Nothing in this subsection shall be deemed to limit in any way judicial review of a decision by the board of supervisors in denying the formation of a special taxing district.
B. For purposes of this section, a special district is any entity proposed to be established on or after January 1, 1989 with substantially the following characteristics:
1. The status of a political subdivision of this state vested with the rights, privileges and immunities of a municipality to the extent consistent with its stated purposes.
2. A limited purpose as stated in its authorizing statutes.
3. An independently elected governing body.
4. Exterior boundaries within or coterminous with a single county.
5. The power to impose and collect taxes.
6. Perpetual succession of its governmental existence, purpose, powers and governing body, subject to a prescribed dissolution procedure.
7. Corporate existence separate and apart from any other unit of government.
#2 Is the Planning Commission required to review the Cahava Springs Revitalization District petition before a Resolution of intent to form a Revitalization District can be considered or approved by the mayor and town council? Yes. The Planning Commission is vested with oversight in matters related to planning, zoning, etc. This is the reason the Planning Commission is the town authority vested under Arizona law with the drafting of the town’s 2015 General Plan.
The mayor and town council’s approval of Cahava Springs Revitalization District will officially reduce the size of the town of Cave Creek. Therefore, because approval of the Revitalization District will reduce the size of the town, present and future planning of the town will be affected, thus invoking and requiring the Planning Commission’s review of the Revitalization District petition and the forwarding of their recommendation to the mayor and town council before the mayor and town council’s approval of any Resolution of intent to form a Revitalization District.
It is unknown why the mayor has deemed the Planning Commission’s review not to be a required review.
In compliance with #1 above, at what stage of the Revitalization District petition process is the Planning Commission required to submit its recommendation to the county board of supervisors?
#3 Do the town’s Articles of Incorporation authorize the mayor and members of town council to reduce the corporate size of Cave Creek? Unknown. No authority allowing the reduction in size of an incorporated municipality could be found to exist except as a process for de-annexation. A.R.S. 9-471.02.
The corporate size of Cave Creek will officially be reduced once the mayor and members of town council approve the formation of a town within our town, i.e., a Revitalization District. Upon approval of any Resolution, for taxing and other purposes, the town of Cave Creek and the Cahava Springs Revitalization District are required to file official amended land surveys for recording with the appropriate state and county offices. The reduction in the size of the town of Cave Creek will be commensurate with the official land survey boundaries for the proposed Cahava Springs Revitalization District.
Recording of the town’s and the Revitalization District’s boundaries with the Tax Assessor’s Office and other State offices voids all property taxing authority by the town of Cave Creek on property(s) inside the Revitalization District’s borders. No property owners or future residents inside the borders of Cahava Springs Revitalization District will be required to pay a town of Cave Creek property tax as long as the Revitalization District remains in existence.
The existence of a Revitalization District is perpetual -- forever.
#4. If a Revitalization District petition is approved, will the citizens of Cave Creek be required to pay a property tax or assessment(s) on municipal services in order to pay the town’s proportionate share of the infrastructure installed outside the borders of Cahava Springs Revitalization District? Yes, unless the town has the required funds without imposing a property tax or assessment.
In fact, the Revitalization Districts statute requires that the Resolution of intent to form a Revitalization District approved by a municipality (Cave Creek) contain a tax levying provision declaring that approval may result in either an assessment on municipal services or that a property tax be levied on the citizens of the municipality (i.e. Cave Creek citizens).[v] In adherence to this mandatory statutory language, the two prior Resolutions approved by the mayor and town council contained this statutory provision.[vi]
Unless the town has the required funds without imposing a property tax or assessment(s) a property tax or assessment(s) will be required to give the town access to funds to pay the town’s required proportionate share of infrastructure costs. The Revitalization Districts statute (1) prohibits a Revitalization District from paying all of the infrastructure costs installed outside the Revitalization District’s borders, or, (2) it requires that the town of Cave Creek reimburse the Revitalization District for the town’s proportionate share of any infrastructure benefit the town gains from the infrastructure paid for by the Revitalization District and installed outside the Revitalization District’s borders.[vii] Mark Stapp has stated that all of the infrastructure will be installed outside the borders of Cahava Springs Revitalization District and that all of the infrastructure costs --- $20-million dollars --- will be paid by the Revitalization District.
A municipal assessment(s) or a property tax will be necessary to comply with the law and pay whatever is judged to be the town’s proportionate share of this $20-million dollar infrastructure expense. As stated above, in addition to the town paying its proportionate share of the installation costs, the statute also requires the town to provide a funding source to pay for the long-term operation and maintenance costs of the infrastructure installed outside the borders of the Revitalization District. This will require funding through municipal assessment(s) or a property tax.
How is a proportionate share determined? The “proportionate share” is determined by calculating the benefit of such improvements to the town and to Cahava Springs Revitalization District. The Revitalization Districts statute gives this decision-making authority to the 3-member Board of the Revitalization District.[viii] However, in the event of foreclosure or bond default by Cahava Springs Revitalization District, if the bond holders or the Bankruptcy Trustee finds the town’s proportionate share to be deficient, the 3-member Board’s proportionate share decision could be challenged exposing the town to as much as 100% of the $20-million dollars in infrastructure costs.
Any proportionate share computation should be based on the following facts: There are 230 home sites within the proposed Cahava Springs Revitalization District borders. Under the town’s Open Space Agreements there are 2,515 homes required to be built within Cave Creek’s borders. The town will gain an infrastructure benefit for these 2,515 homes as a result of the infrastructure installed outside the Revitalization Districts borders and paid for by Cahava Springs Revitalization District. Under this scenario, the infrastructure benefit to the town, and therefore its proportionate share, is at least ten times greater than the proportionate share of the infrastructure benefit to Cahava Springs Revitalization District.[ix]
A property tax must be approved by Cave Creek citizens. However, the mayor and town council members can impose assessment(s) on municipal services to pay the town’s proportionate share without obtaining the approval of Cave Creek citizens. The 300% water rate increase is an example of an assessment imposed on Cave Creek citizens by the mayor and town council.
If a property tax should be approved by Cave Creek residents to pay for the town’s proportionate share of infrastructure costs, no Cahava Springs Revitalization District resident will be required to pay this property tax as long as the Revitalization District remains in existence. The existence of a Revitalization District is perpetual.
In full disclosure, the two prior and now void Resolutions contained a provision declaring that the town will not be responsible for payment of infrastructure costs. Unlike the mandatory statutory provision requiring notice of the likelihood of a property tax or assessment be contained in any Resolution, this non-payment provision is not a mandatory statutory provision, nor is it based on any other statutory requirements. This provision in the Resolutions is unenforceable and wholly contrary to all of the legal requirements that notice of the likelihood of a property tax or assessment be given to citizens.
Without invoking the authority in #5 below, before approval of (yet) another Resolution of intent to form a Revitalization District, the mayor and members of town council should publicly explain where and how the required funds to pay the town’s proportionate share of infrastructure costs and the long-term maintenance and operation costs of the infrastructure will be obtained without an assessment(s) or property tax.
#5. Are the mayor and town council members authorized to order payment of the town’s proportionate share – including bond service costs -- without citizen approval? Yes. The Revitalization Districts statute allows the mayor and town council members to summarily participate in the payment of the bond debt service. The definition of “summarily” means “without notice; precipitately.” The entire statutory section reads: 48-6811. Participation by Municipality. The governing body of the municipality, by resolution, may summarily order the participation by the municipality in the costs of any public infrastructure purpose, including the payment of bond debt service.
The “municipality” referenced in this provision is Cave Creek as Cahava Springs Revitalization District is not an incorporated city or town, does not meet the criteria to be an incorporated city or town, and is not a municipal corporation.
#6. Is a Revitalization District a municipality the same as every other city or town in Arizona? No. The proposed Cahava Springs Revitalization District fails to meet the constitutional requirements for forming a city or town. The Arizona Constitution outlines the requirements for forming a city or town. Those requirements are contained in Article 13 “Municipal Corporations,” Section 2 of the Arizona Constitution. Among its many requirements, section 2 mandates that to form a city or town the proposed municipality must contain a population of more than 3,500[x] residents, and that 14 qualified electors from the proposed municipality compose the board of freeholders.
Despite the constitutional deficiency of a Revitalization District, the Arizona legislature has endowed these “Special Taxing Districts” with quasi-municipal authority to levy taxes. Taxing authority is constitutionally-restricted to incorporated cities, towns, or municipal corporations, of which Cahava Springs Revitalization District is not.
NOTE: There are indications that a Revitalization District would qualify as a “franchise.” However, under the Arizona Constitution, “Municipal Corporations,” Article 13, Sec. 4, approval as a franchise would be decided by the residents of Cave Creek, not the mayor and members of town council.[xi] See, also #7 below.
#7. Does the Arizona Constitution authorize a Revitalization District with tax levying authority? No. To possess the qualifying criteria to be a tax levying authority the entity must be a constitutionally-created incorporated town or city, or the entity must be a municipal corporation. The Arizona Constitution authorizes tax levying authority to incorporated cities, towns, and municipal corporations only. [xii] The statutory restriction on this tax levying authorization is evidenced in A.R.S. Title 9, Ch. 1, Art 3, 9-137. Powers and duties. “Cities and towns incorporated pursuant to the provisions of this article shall have all the powers, duties, rights and privileges granted to incorporated cities and towns under the laws and constitution of this state.
The Petitioners for Cahava Springs Revitalization District are for-profit corporations, not municipal corporations, and are not a constitutionally-created incorporated city or town.
Without being an incorporated city or town, or a municipal corporation, the Petitioners for Cahava Springs Revitalization District cannot levy or collect taxes or assessments. And, without tax levying authority, the funding mechanism necessary for the Petitioners of the Revitalization District to repay the $20-million dollars in bond money to its bond holders does not exist. See, also #6 above.
#8. Are Cave Creek residents allowed to submit oral or written comments for the Formation Hearing? This answer depends on the mayor. However, if the mayor were to recognize that there are others besides Mark Stapp who have a property interest inside the borders of Cahava Springs Revitalization District, it would mean at least a 6-month delay in the council’s approval of any Resolution of intent to form a Revitalization District. And by all appearances, the mayor and members of town council are working toward an expedited approval of the Revitalization District.
Section (B) of A.R.S. 48-6803 Notice states that notice of the Formation Hearing must be given to “all other persons claiming an interest in such property who have filed a written request for a copy of the notice within the six months preceding or at any time following the adoption of the resolution of intent to form the district.”
To date, the mayor and members of town council have never challenged Mark Stapp’s claim that he is sole owner of the property inside the proposed Cahava Springs Revitalization District and they have failed or refused to recognize that others have a property interest inside the borders of Cahava Springs Revitalization District. The mayor and members of town council have already approved two Resolutions in reliance of Mark Stapp’s claim as sole owner in total disregard of the property interest of Cave Creek citizens and an independent, third-party non-profit.
Those other persons with a property interest are the citizens of Cave Creek and an unknown independent, third-party non-profit Arizona corporation.
The Revitalization District statute states that persons claiming a property interest within the borders of the proposed Revitalization District can submit oral or written comments for the Formation Hearing. Under A.R.S. Title 9, Ch. 2, Art. 3, 9-254. Title to streets[xiii] the citizens of Cave Creek have had a property interest within the borders of Cahava Springs Revitalization District since 2006 when the Final Plat for the Cahava Springs development was approved. In addition, and as evidenced in #9 below, the April 25, 2005 Pre-Annexation and Development Agreement Between Town of Cave Creek and Apache Springs Land, L.L.C. (“Development Agreement”) also gives the citizens of Cave Creek and an independent, third-party non-profit a property interest inside the border of Cahava Springs Revitalization District.
POLITICAL NOTE: A.R.S. 48-6803(B) states that the notice of the Formation Hearing can be published in the “official newspaper of the municipality, if there is one…” The May 18, 2015 town council meeting agenda contained an agenda item asking the town to declare the Sonoran News to be the “official newspaper of the municipality” (Cave Creek). No decision was made on this agenda item at the May 18th meeting. The matter was continued to negotiate a lower cost for publishing legal notices in the Sonoran News than what Don Sorchych stated he would be willing to charge.
#9. Are there persons other than Mark Stapp who can claim to have a property interest within the boundaries of the proposed Cahava Springs Revitalization District? Yes. Those persons are the citizens of Cave Creek and an unknown, independent, third-party non-profit Arizona corporation.
The April 25, 2005 Pre-Annexation and Development Agreement Between Town of Cave Creek and Apache Springs Land, L.L.C. (“Development Agreement”) gives the town (i.e. Cave Creek citizens) and/or an independent third-party non-profit corporation a property interest within the proposed Cahava Springs Revitalization District borders. If the property interest of Cave Creek citizens and the independent, third-party non-profit Arizona corporation has not been abridged by the mayor, town council, staff, or Mark Stapp via any of his multiple corporate entities, the Cahava Springs Revitalization District petition must be halted until these “other persons” have been afforded Due Process.
Under the right to Due Process, the citizens of Cave Creek and the independent, third-party non-profit must be given six months’ notice[xiv] of the mayor and town council’s intent to form a Revitalization District before the mayor and town council can approve any Resolution of intent to form a Revitalization District.
The Development Agreement clearly states that ownership of the Open Space system within the now proposed Cahava Springs Revitalization District is required to be titled and under the control of either the town or an independent, third-party, non-profit. Therefore, either the town or this independent, non-profit third-party can lawfully assert to having a property interest within the proposed Cahava Springs Revitalization District’s borders by means of the Open Space system.
The Development Agreement contains the following pertinent trail and open space provisions:
Trail System within Cahava Springs Revitalization District: At pg. 7, of the Development Agreement, section 3.5 Trails it states that trail “easements shall remain privately owned and maintained, but shall be available to the public” or that trails existing as public trails “shall be publicly owned and maintained.” Mark Stapp has claimed that 3 ½ miles of trails exist within the borders of the proposed Cahava Springs Revitalization District. Are these trails “privately owned” or “publicly owned”? If “publicly owned,” are the trails are owned by Cave Creek or Maricopa County? Have the requisite deeds been recorded in the Official Records of Maricopa County? If so, when and what is the recording number(s)? If “privately owned” are the trails recorded as easements or have other protections been recorded to assure continued public access to the trail system after approval of the Cahava Springs Revitalization District? If so, where is a copy of these recorded easements?
Open Space System within Cahava Springs Revitalization District: At pg. 7, of the Development Agreement, section 3.6 Open Space, it states that “…the Owner agrees that within ninety (90) days of preliminary plat approval by the Town for the entire Property, the Owner shall voluntarily and without consideration convey at least 175 acres (“the Preserved Open Space”) of the Town Property to, at its sole discretion, either the Town or an independent, non-profit, third-party capable of managing the Preserved Open Space…”
Official records indicate that Final Plat approval was recorded in the Official Records of Maricopa County in 2006. Official records also indicate that the Open Space System was transferred to one of Mark Stapp’s non-profit corporations, Cahava Springs Conservancy. This transfer of the Open Space system to Mark Stapp via one of his corporations violates the terms of the Development Agreement. The Development Agreement requires that the Open Space system become either town property, or that it be placed in the possession of an independent, non-profit third-party. Any possession or transfer of the Open Space system to Mark Stapp, or that includes any of Mark Stapp’s multiple corporations, does not comply with the agreed upon terms of the Development Agreement.
A search on the Arizona Corporation Commission website indicates that Cahava Springs Conservancy, the non-profit corporation to whom possession of the Open Space was transferred, was dissolved and has not been a corporation in good standing in Arizona since May, 2013. See also #11. What entity is in possession of the Open Space system?
Was there ever any deed(s) recorded in the Official Records of Maricopa County giving the Open Space system land to the Cahava Springs Conservancy? If so, what is the recording number? What independent, third-party non-profit entity now has recorded title and possession of the Open Space system land? Is the deed giving this entity ownership of the Open Space system recorded in the Official Records of Maricopa County? If so, what is the recording number?
#10. Have the original terms of the April 25, 2005 “Pre-Annexation And Development Agreement Between Town Of Cave Creek And Apache Springs Land, L.L.C.,” been officially amended or extended? Unknown. The claim by the mayor and Mark Stapp and his legal counsel the law firm of Gammage and Burnham, is that an extension was signed and that the 2006 Final Plat was amended.
According to records, the Final Plat was approved in 2006. There was an amendment to the Final Plat during a town council meeting on October 6, 2014. It is unknown whether the Final Plat amendment approved by the town council on October 6, 2014 was recorded in the Official Records of Maricopa County within 10 days of the executed amendment in accordance with p. 14, section 5.16 of the Development Agreement.
The original April 25, 2005 “Pre-Annexation And Development Agreement Between Town Of Cave Creek And Apache Springs Land, L.L.C.” was for a period of ten (10) years. Absent evidence of an extension signed by all authorized parties, the Development Agreement expired on April 25, 2015.
A search of every town council meeting agenda item from April 25, 2005 to the present date does not evidence any extension(s) of the Development Agreement being placed on a town council meeting agenda for council approval and mayor signature.[xv] As a budget item, town council approval at a town council meeting is required. At p. 14, section 5.16 of the Development Agreement it states that any amendments or extensions are required to be recorded in the Official Records of Maricopa County within 10 days of the executed extension(s) or amendment(s).
Where is the documentation evidencing the dates on the recording of the amendment(s) and extension(s)?
#11. Who were the parties authorized to sign an amendment or extension of the April 25, 2005 “Pre-Annexation And Development Agreement Between Town Of Cave Creek And Apache Springs Land, L.L.C.” For the town of Cave Creek, the authorized signer would be the mayor. If any amendment(s) or extension(s) of the Development Agreement was signed after May 12, 2011, the only parties authorized to sign on behalf of Apache Springs Land, L.L.C., are its managers John May, Jeffrey Peoetsch, and Tom Javits. As of May 12, 2011 Mark Stapp is designated as a “Member” of Apache Springs Land L.L.C., not as a “Managing Member” as he claimed in 2005.
Of further note is the fact that, Mark Stapp signed the May 12, 2011 amendment to the Apache Springs Land, L.L.C. Articles of Incorporation as “MS Stapp Investments, Inc.” However, the Arizona Corporation Commission website reflects that “MS Stapp Investments, Inc.,” has not been a corporation in good standing in Arizona since August 11, 2009. See, also #9 above.
This article does not begin to shed light on all of the legal issues and questions related to Revitalization Districts. As decisions continue to be made by the mayor and members of town council, the legal issues and questions surrounding those decisions will be researched and appear in further articles.
Watch this space. Be informed. Stay informed. Get involved. Demand the truth.
Share your thoughts, questions, or comments below. Just remember the rules: Be nice … be honest … or be deleted. (All social media links are not currently active. To leave a comment or read the comments of others please use "Comments" button below the endnotes.)
Janelle Smith-Haff
[email protected]
Tuesday, May 26, 2015
[i] Resolution No. 2015-13.
[ii]Arizona Constitution, Art. 14, Sec. 5. Foreign corporations; transaction of business. No corporation organized outside of the limits of this state shall be allowed to transact business within this state on more favorable conditions than are prescribed by law for similar corporations organized under the laws of this state; and no foreign corporation shall be permitted to transact business within this state unless said foreign corporation is by the laws of the country, state, or territory under which it is formed permitted to transact a like business in such country, state, or territory.
[iii]Other referenced citations in this article appear in these endnotes.
[iv] A.R.S. Title 48, Ch. 39, Art. 1.
[v] A.R.S. Title 48, Ch. 39, Art. 1, 48-6802 Resolution of intent; eligible participants; district board. (6) That formation of the district may result in the levy of taxes or assessments to pay the costs of improvements constructed by the district and for their operation and maintenance.
[vi] Resolution No. 2015-13, Sec. 2(G): “The formation of the District will result in the levy of special assessments or ad valorem taxes to pay costs related to: (i) the formation and operation of the District; (ii) infrastructure improvements financed, constructed or acquired by the District; and (iii [sic]) operation and maintenance of such infrastructure improvements.”
[vii] A.R.S. Title 48, Ch. 39, Art. 1, 48-6801 Definitions. 8. “Infrastructure.”
[viii] The mayor and town council, not Mark Stapp, appoint the 3-member Board of the Revitalization District.
[ix] Some could rightly argue that certain Cave Creek residents will immediately benefit from the infrastructure installation whereas Cahava Springs Revitalization District will receive no infrastructure benefit because no infrastructure will be installed inside the border of Cahava Springs Revitalization District and there are no residents. Acceptance of this argument exposes the town to paying 100% of the $20-million dollars in infrastructure costs.
[x] “2. Charter; preparation and proposal by board of freeholders; ratification and approval; amendment Any city containing, now or hereafter, a population of more than three thousand five hundred may frame a charter for its own government consistent with, and subject to, the Constitution and the laws of the state, in the following manner: A board of freeholders composed of fourteen qualified electors of said city may be elected at large by the qualified electors thereof, at a general or special election, whose duty it shall be, within ninety days after such election, to prepare and propose a charter for such city. Such proposed charter shall be signed in duplicate by the members of such board, or a majority of them, and filed, one copy of said proposed charter with the chief executive officer of such city and the other with the county recorder of the county in which said city shall be situated. Such proposed charter shall then be published in one or more newspapers published, and of general circulation, within said city for at least twenty-one days if in a daily paper, or in three consecutive issues if in a weekly paper, and the first publication shall be made within twenty days after the completion of the proposed charter. Within thirty days, and not earlier than twenty days, after such publication, said proposed charter shall be submitted to the vote of the qualified electors of said city at a general or special election. If a majority of such qualified electors voting thereon shall ratify such proposed charter, it shall thereupon be submitted to the governor for his approval, and the governor shall approve it if it shall not be in conflict with this Constitution or with the laws of the state. Upon such approval said charter shall become the organic law of such city and supersede any charter then existing (and all amendments thereto), and all ordinances inconsistent with said new charter. A copy of such charter, certified by the chief executive officer, and authenticated by the seal, of such city, together with a statement similarly certified and authenticated setting forth the submission of such charter to the electors and its ratification by them, shall, after the approval of such charter by the governor, be made in duplicate and filed, one copy in the office of the secretary of state and the other in the archives of the city after being recorded in the office of said county recorder. Thereafter all courts shall take judicial notice of said charter. The charter so ratified may be amended by amendments proposed and submitted by the legislative authority of the city to the qualified electors thereof (or by petition as hereinafter provided), at a general or special election, and ratified by a majority of the qualified electors voting thereon and approved by the governor as herein provided for the approval of the charter.”
[xi] Arizona Constitution, Article 13, Sec. 4. Franchises; approval of electors; term “No municipal corporation shall ever grant, extend, or renew a franchise without the approval of a majority of the qualified electors residing within its corporate limits who shall vote thereon at a general or special election…”
[xii]Arizona Constitution, Article 9, Sec. 6: 6. Local assessments and taxes Incorporated cities, towns, and villages may be vested by law with power to make local improvements by special assessments, or by special taxation of property benefited. For all corporate purposes, all municipal corporations may be vested with authority to assess and collect taxes.
[xiii] A.R.S. Title 9, Ch. 2, Art. 3, 9-254. Title to streets Upon filing a map or plat, the fee of the streets, alleys, avenues, highways, parks and other parcels of ground reserved therein to the use of the public vests in the town, in trust, for the uses therein expressed. If the town is not incorporated, then the fee vests in the county until the town becomes incorporated.
[xiv] A.R.S. Title 48, Ch. 39, 48-6803. Notice. Section (B).
[xv] There was a town council meeting on October 6, 2014 regarding Final Plat amendment approval for Cahava Springs but this meeting did not involve an extension of the original Development Agreement.
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