Response to Resolution 3309 for Council Approval
By Jim Ferris, August 25, 2022
In response to the last ‘Whereas’ of Res, 3309 page 1 – The Rim Country Educational Alliance- Separate Legal Entity (RCEA-SLE) property does not appear to have been officially annexed into the Town of Payson (TOP). Are there any records or documentation to affirm that there has been a petition filed and approval for annexation?
If a Separate Legal Entity (SLE) is an autonomous public subdivision owning its own land, does the Town have any jurisdiction or authority over the SLE and its real property? Is it not unlike a small county or any other public subdivision?
If the SLE is in town limits and subject to Town building and zoning ordinances, why do we need a Plan Review and Field Inspection Agreement (PRFIA)? Why have we not enforced Town ordinances on this property all along?
Why did the Town not enforce our previous PRFIA with the RCEA-SLE (Res. 2898) dated January 21, 2016, and expired December 31, 2020? Because I was told that they are a Separate Legal Entity, and they could do whatever they wanted on THEIR property. The RCEA bulldozed many trees along with substantial excavating work on their property in June of 2019. A year and a half before the PRFIA expired. They did this without an approved drainage plan with the Arizona Department of Environmental Quality. They did this without having the work approved through the Town. But don’t look through the rear-view mirror, we can trust them now.
The RCEA-SLE claimed that they did not have to follow the Town ordinances because they are a separate legal entity and can do whatever they wanted on their property.
Res. 2898 was also signed by the President of the RCEF. Now that the RCEF has a lease-leaseback agreement with the RCEA I would think that it would be incumbent to have the RCEF as part of the new PRFIA Agreement.
But now our town administration and town legal are claiming that the RCEA-SLE property is in town limits. Again, I ask – Why do we need Res. 3309? Why not simply enforce town ordinances within what they claim are town limits?
By our town administration declaring the RCEA-SLE is within Payson town limits and attempting to have the Council affirm that notion by approving Res. 3309, the Town is cracking the door open for the RCEA-SLE to coerce Payson to share our SRP water rights with them. I am concerned that this may affect our negotiated water rights with the SRP.
If the Council approves Res. 3309, will the Town have to contract for or otherwise secure additional civil engineering services, and permitting and inspection services from third parties; or possibly have to hire more staff? What happens when the RCEA-SLE decides to terminate the PRFIA? – Or it is allowed to expire?
Past explanations for claiming the RCEA-SLE property is within town limits was the fact that the town re-zoned the property for educational facilities. At the prompting of our former Mayor, Kenny Evans, past MHA Secretary and Town Public Works Director prepared and presented the zoning change to the Town Council and it passed. Just because the Town changed the zoning status of parcel #304-01-375 does not mean the town acted within its authority to do so. The act of rezoning does not substitute for the proper process of annexation.
If TOP zoning, building, and development codes apply to commercial and residential development within the Town of Payson and requires PRFIs, then why is this Agreement necessary?
As a member organization of the SLE, has Star Valley been involved or consulted in the construction of this Agreement?
The RCEA-SLE property was designated for higher learning. I have not heard any plans for a facility to be built for that purpose.
¶14.15 Cancellations. Redundant wording. The parties by mutual agreement may terminate this Agreement before the expiration date by mutual agreement.
Because of Rim Country Educational Foundation’s (RCEF) having exclusive enterprise right to all development on the RCEA-SLE property, the RCEF should be a party to this agreement. The RCEF is a domestic for-profit LLC and is wholly owned by the MHA Foundation which by extension of MHA’s control of the RCEF and the only source of revenue for the RCEA-SLE and the RCEF, the MHA should be a party to the new agreement.
In contemplation of this new IGA, will the RCEA-SLE agree to come into compliance with Government Accounting Standards Board rules and regulations and provide compliant documents to the Town? IGA Resolution No. 2617 §3: ¶31 states, “The Entity [RCEA-SLE] shall operate within an annual adopted budget and comply with all statutes, laws and regulation including rules established by Government Accounting Standards Board.”
The MHA Foundation and the RCEF should be named in §13 Mutual Indemnification.
§14.7 No Third-Party Beneficiaries. It appears to me that this Agreement violates A.R.S §38-503 Conflict of Interests in that this Agreement conveys benefit to the RCEF and the MHA. Neither are a party to this Agreement.
¶14.13 Non-Appropriation/Non-Receipt. This paragraph would lead me to believe that for the Town’s security and financial protect, we would want to secure and analyze the financial statements of the parties with whom we are entering into a contract of this nature. It would be prudent for any party entering into a contract where you are relying on the financial ability of each contracting party that they should demonstrate their financial ability to perform their contractual obligations.
The IGA Res. 2617 approved July 7, 2011, and the attached Governance Agreement is only signed by the TOP and TOSV. The town has had substantial contentions over several provisions of this IGA. The TOP and the TOSV seems to have had it in their authority to mutually agree to amend the IGA at any time. However, it appears that there has not been the will or courage to simply amend Res. 2617. Whatever the reasoning for not correcting deficiencies – please be aware that the TOP and the TOSV by mutual consent had and still have the authority to terminate Res. 2617 and the Entity it created.
I do not support Res. 3309. There are too many questions and concerns. If past performance is the best gage to determine future results, we are in trouble with this one.
The last item on Town Council Agenda for August 25, 2022, is consideration to Recess to Executive Session and discuss RCEA Agreements. This is way out of order. So, the Town Manager wants the Council to consider and possibly approve a new and weak IGA with the RCEA before a discussion in executive session regarding RCEA Agreements. If the Town is considering taking any legal action against the RCEA, that should be discussed before we consider entering into a new IGA. Any intentions or considerations of entering into any new agreements or memorandum of understanding with the RCEA/MHA/RCEA should be publicly discussed for transparency and citizen feedback. What we do going forward could create a huge financial liability for the Town. Without transparency it’s hard to not be apprehensive and concerned.
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