Protecting Pinal County’s Property Tax Payers

Over the years, covering multiple Boards of Supervisors andCountyManagers,PinalCountyentered into numerous agreements waiving impact fees. These are fees used to cover the cost of expanding the water supply and other necessary services as required byArizonalaw. The waiving of impact fees literally means property taxpayers must make up the loss of revenue to the County.

 In October 2006, the Pinal County Board of Supervisors passed and adopted Ordinance No. 101806-DF, which established a development fee schedule forPinalCounty. The purpose of the ordinance is to require new developments to pay for their proportionate share of capital costs associated with providing public safety, streets, and parks facilities.

 In November 2000, Pinal County and Johnson Ranch/Centex Homes amended a November 1997 agreement waiving development impact fees for ten years with an option to renew for an additional ten years. The 1997 agreement expired in November 2007. When Johnson Ranch/Centex Homes requested another ten year waiver of development impact fees, the Board of Supervisors denied the request.

 One of the primary reasons the Board of Supervisors denied the extension was based on a vastly different set of facts facing the Board of Supervisors in 2007 versus the Board of Supervisors in 1997. In 1997, the population of San Tan Valley was estimated at 2000 residents. In 2007, the population was estimated at 40,000 residents. Today, the population is over 80,000 residents, a forty fold increase.

 Growth of this magnitude places a draconian strain on County resources, e.g., the Sheriff’s Department, Public Works, and Public Health, to mention a few. IfPinalCountyviewed County government capitulated to developer demands to waive impact development fees, the lost revenue would be made up in property taxes during a recessionary period.

 Johnson Ranch/Centex Homes developed 4,880 lots with 808 lots remaining to be developed at the time. The build out of 4,880 lots outstripped the infrastructure agreed to in the original development agreement. The exponential population growth inPinalCountywas not foreseen in 1997, lending credibility to the idea that theArizonalegislature should redefine a phased development from ten to five years,

 As a result of the County’s denial of extension of waiver of impact development fees, Johnson Ranch/Centex homes decided to litigate the matter. At approximately the same time, an Arizona State Representative, on behalf of an anonymous developer, attempted to sponsor a bill (HB 2578) freezing all development impact fees. Members of the Pinal County Citizens for Excellence in Government, a non-partisan organization, managed to convince the Representative that his bill was not friendly to property tax payers. The bill was withdrawn.

 The importance of this litigation is evidenced in the 21 development impact fee agreements inPinalCounty. The potential for property tax payers to incur $500 million in new taxes is real. Two developers opted for litigation: Johnson Ranch/Centex Homes and Grosvenor Holdings (Entrada del Oro). Centex Homes prevailed in Superior Court.

 The County appealed on the basis of the Arizona Gift Clause, where the State Constitution prohibits the County from giving or loaning its credit in the aid of any individual or corporation by donation, grant, subsidy or others (Article 9, Section7), public policy consideration, changed circumstances unforeseen at the time of the original agreement, and the best interests of the public.

 In December 2010, the Court of Appeals reversed and remanded the ruling of the Superior Court finding improper the grant of summary judgment in favor of Centex Homes. The Court of Appeals found ambiguity in the Development Agreement and directed that the matter could not be settled by summary judgment; it had to be heard by the “trier-of-fact.”

 Centex Homes filed a Petition for Review with the Arizona Supreme Court. The Petition for Review was denied in May 2011. In June 2011, the Court of Appeals issued a Mandate commanding the Superior Court to conduct such proceedings as are required to comply with the Appellate Court decision. Centex Homes has yet to initiate any proceeding in Superior Court.

 Pinal County Management and the Board of Supervisors were right in refusing to extend the development impact fee agreement and it is right in defending its decision in court. The case is not yet closed but every Pinal County property tax payer should stand up and cheer the position Pinal County Government has taken in this matter.

 Development impact fees are assessed subject to the doctrine that new growth should pay for its own costs; property tax payers should not subsidize homebuilders and new residents.

 

 


Comments

  1. I realy wish reporters would quit going for sensationalism and mistate the facts. To my knowledge Pinal County does not supply any water or have a water company, also there Pinal County does not have or run any sewer treatment or trash service in Pinal County. Please check your facts and quit trying to spook people with inaccuate information

  2. San Tan Valley has one of the worst arterial road systems in the state, if not the country. The main highway, serving almost 100,000 people, is still two lanes in some places. The developers should be building the primary and secondary roads now, not waiting .

  3. I have lived here all my life, so maybe I have a little credibility. Just a few years ago Queen Creek was just a little farming community and San Tan Valley was farmground. People flocked here due to the cheap housing prices then the gamble that thier new home purchase would double in value and sell sell sell. Well folks it is, has been and will be for a little longer bust time. Everyone gambled and most lost!

    As far as the road system going into San Tan Valley just a few years ago Hunt Hwy was a dirt road. The developers have done all they can do and with the stop of the boom the County does not have enough impact fees or tax base to do much about anything. Wake up, carpool, park the SUV pay attention to your kids and family, its going to be a long haul.

  4. You can tell that newbies, who have absolutely zero historical frame of reference, wrote this article.

    Pinal County was – and still is in many circumstances – a masterpiece result of total corruption and collusion between rough-hewn local politicians and the greedy, grubby development crew from the Phoenix Valley. There is not one politician, past or present, or one contractor, developer, realtor, broker, know it all demi-gog, or any of the other greedy pigs involved, who didn’t know the rules of the game for the past 25 years in the unincorporated – wink and nod – development areas of Pinal County. Many of these same folks raided and pilliaged cities like Eloy, Casa Grande, Maricopa and Apache Junction prior to perfecting their trade on the rest of Pinal County.

    Fat and sassy Sandie Smith told anybody who would listen that “growth just snuck up on us.” That after paying for and sitting in on multiple presentations by Elliott D. Pollack & Co., and the Rose law Group regarding the next 25 years’ future development of Pinal County. Jingling Jimmy Kerr told everybody that roads needed to be pave to “avoid dust problems,” and he paved billions of dollars of roads to nowhere – lone big farm friends and political donors – in the middle of nowhere. The former Pinal County Manager is in prison for his part in all the mess, and the rest of them all skated.

    Now comes the tax bills that the rest of us will have to pay for the next 25 years in order to straighten out the mistakes of the past. Look at the numbers, people.

    There is absolutely no way that continuing to tax a declining property valuation pool, can ever pay for an increasing Budget the size and scope currently ongoing in Pinal County, without massive tax increases throughout the County.

    Huge tax increases are in store for user fees, franchise fees, utility taxes, cable TV taxes, telephone/cell phone taxes, trash, sewer, water user fees, sales tax increases, dump fee increases, gas tax increases and on and on and on.

    And the greedy pigs are once again snorting and circling the trough
    in preparation for the next round of swill …

  5. Patriot Guy says

    Anthem down south of Florence and Queen Creek had many community improvements put in and even had businesses come in which provided needed employment. If they can build a safe divided road with traffic lights and street lights then why hasn’t Johnson Ranch/Centex Homes been required to do the same? Right from the start, these companies were given privileges and passes that only cost us taxpayers to foot the bill while they lined their pockets and the pockets of the politicians that they handle. Notice the honorless law group, The Rose Law Group, is invloved and that means years more of continual bombarding the Pinal County taxpayers with footing the bill for these politcally connected groups. What is next? Don’t look toward D.C., Jeff Flake or John McCain to speak up for us. We do have however John Fillmore and Steve Smith in place to watch the backs of all Arizonians and in 2012 Todd House will be on the BOS and the people’s voice and concerns will be heard and acted upon.

  6. Todd House a voice for the people? Todd House? He voted for tax increases in the Fire District. He voted for increased Budgets twice. Todd House as your voice? Todd House doesn’t know his ass from a fire hose. Good luck with that one.

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