Cave Creek approves APS transmission easement, advances 982-lot Kaba Springs revitalization district

Cave Creek Navigates Dueling Crises: Power Line Compromise and Revitalization District Formation Amid Bridge-Building Allegations

On April 28, 2016, Cave Creek Council voted to approve a $50,000 settlement with Arizona Public Service for a 69-kilovolt transmission line easement while simultaneously advancing a revitalization district for the Kaba Springs development—two decisions that revealed deep fractures in the community over infrastructure necessity, financial oversight, and land-use control.

The transmission line settlement, contingent on continued negotiations with Whispering Hills through May 20, 2015, and the approval of Resolution 2015-3 to initiate the Kaba Springs Revitalization District formation process both passed 6-0, yet neither achieved consensus comfort. Council members articulated competing imperatives: ensuring redundant electrical service to prevent catastrophic power outages that could disable the town's water system, versus protecting property owners from unwanted transmission infrastructure and preserving traditional town oversight of development finance mechanisms.

The meeting lasted approximately three hours and included twelve public speakers, several offering detailed critiques of the revitalization district structure and its potential to create a "town within a town" insulated from town governance.

APS Transmission Line Easement Settlement

Timeline

Applicant presentation (APS / Town Attorney): Town Attorney Richard Burom presented the result of months of negotiation over a right-of-way easement for APS's 69-kilovolt redundant transmission line along the north side of Carefree Highway near 40th Street. The town had initially received an appraisal of $177,000 from APS, which APS then reduced to $23,000 in a revised offer. After further negotiation, APS proposed a final settlement of $50,000 for approximately 1.2 acres of easement rights (a narrow strip slightly over 50,000 square feet) to construct a single-line, steel monopole transmission system providing redundant service to all of Cave Creek plus portions of Carefree and northern Phoenix.

Burom emphasized that the easement had been modified to limit use to a single APS line only, preventing third-party carriers (such as Sprint or Verizon) from leasing or licensing the easement to install competing infrastructure. He noted that much of the property lay within the floodplain or floodway and that the town's wastewater treatment plant occupied the area, limiting practical utility of the land.

Staff recommendation: Burom recommended approval of both the $50,000 settlement amount and the negotiated easement form, describing the dollar figure as "reasonable" and "maybe very reasonable" given the narrow, flood-prone strip and comparable market analysis. He cautioned, however, that the recommendation was based on economic and legal factors and that "social and political considerations" regarding Whispering Hills lay outside the scope of his legal opinion.

Public comment: Twelve speakers addressed the transmission line issue over approximately ninety minutes. Whispering Hills residents and their attorney, Bill Suan, led the opposition, arguing that the line should be relocated to the south side of Carefree Highway to minimize impact on their community. Suan presented extensive documentation, including discovery through public records requests revealing that Phoenix owned two parcels (A and B) on the south side, that parcel A is reserved and parcel B had not been annexed into Phoenix, and that a 30-foot utility corridor exists on the south side where Southwest Gas operates a line. He requested a continuance of approximately two weeks to May 20 to allow time for meetings with Phoenix Vice Mayor Jim Wearing and Southwest Gas to explore south-side placement.

Karen Tomaine, Whispering Hills community representative, testified that residents had engaged with APS and state land officials but that Phoenix and the Arizona State Land Department had declined to cooperate, citing preservation concerns and lack of a dedicated road right-of-way on the south side (the road exists on state trust-land lease). Tomaine stated:

"We have documentation and information from top ranking people in Phoenix that said to us that APS can ask for permission to put these poles on the south side of the highway." — Karen Tomaine, Whispering Hills resident representative

She emphasized the property-value impact on front-facing homes and requested the continuance to pursue the south-side option further.

Bruce McNeel, a Cave Creek resident and disaster management professional with experience following hurricanes and earthquakes, questioned the cost-benefit of underground versus overhead construction at 65-foot poles and argued that utility companies consistently express regret over overhead lines in disaster scenarios. APS representative Stan responded that the cost to underground 2,000 feet of the 69-kilovolt line would be approximately $1 million (APS's estimate), or roughly $3 million per mile, compared to much lower overhead construction costs.

A new Whispering Hills resident, J. Fio, sought clarification on the settlement terms and expressed confusion about whether the town was "selling out our landscaping" for $50,000. Burom used the exchange to explain the applicability of Arizona's constitutional right of eminent domain, noting that APS could compel the taking regardless and that the negotiated settlement was preferable to condemnation litigation.

A public commenter identified as Bruce, a 15-year Cave Creek resident, raised concerns about whether the town possessed sufficient expertise to evaluate complex utility infrastructure decisions and suggested that future developers applying for special districts should be required to pay consulting fees so the town could retain independent legal expertise.

Katie Pend, APS Government Affairs representative, briefly stated that APS was copied on Suan's letter to Phoenix Vice Mayor Wearing and that Wearing's position remained supportive of the north-side route. She noted:

"Speaking with council member Wearing this afternoon his position remains the same; he's supportive of the alignment in its current route." — Katie Pend, Arizona Public Service Government Affairs representative

Council discussion: Council members expressed frustration with the impasse but divided on whether to grant a continuance. Councilman McGuire, who had been deeply involved with Whispering Hills for two years and had requested a continuance at the previous August meeting, acknowledged the long delay but supported Mayor Francke's proposal for a contingency approval with a deadline of May 20, 2015:

"It's been a struggle, you heard what Ernie said and I can't speak for the other Council people but I think it's a good thing to give them one last Hail Mary shot even if the answer is no." — Councilman McGuire

Mayor Francke articulated the dual imperative driving the council toward settlement. While sympathetic to Whispering Hills, he emphasized the town's responsibility to ensure power system redundancy to prevent catastrophic outages that could disable water delivery to residents, particularly during hot summer months:

"When power goes out in our community it not only affects our homes, it also affects everything that we depend on and take for granted that includes our water system and this redundancy of this system is to prevent a tragic moment like a power outage from turning into a tragic event like not being able to get water to our citizens in July or August or be able to respond to an emergency that would require water in some way." — Robert Morris proposed approving the settlement contingent on continued negotiations through May 20, 2015. Councilman Bunch, who had been vice mayor during earlier state land department and APS meetings, stated that it had become apparent Phoenix and the state land department did not want the line on the south side and that the town had exhausted realistic options. Vice Mayor Lar supported the contingency, noting that while a Hail Mary approach seemed unlikely to succeed, the compromise gave Whispering Hills additional time without materially delaying APS's timeline.

Councilman McGuire offered an additional comment, noting that while he understood the individual hardship for Whispering Hills neighbors, the town's overarching duty was to vote in the best interest of all residents, including securing critical infrastructure.

Vote: The council approved the settlement and easement by a vote of 6-0, contingent upon no agreement being reached by May 20, 2015, after which the settlement would take effect. No individual votes were recorded by name; the motion passed unanimously.

Opposition

Number of speakers against: Approximately 8 speakers opposed or raised concerns about the north-side route; 2 speakers supported the bike lane project (unrelated); 1 speaker supported the water policy adjustment.

Main concerns:

1. Property value impact: Whispering Hills residents testified that the 65-foot steel monopole transmission line positioned directly across the front of their homes would significantly reduce property values and real estate marketability.
2. Feasibility of south-side relocation: Whispering Hills attorney Bill Suan presented detailed public-records evidence suggesting that Phoenix-owned parcels on the south side could accommodate the line and that a utility corridor already existed (Southwest Gas line pre-dating 1959).
3. Undergrounding feasibility: Public commenters questioned why undergrounding was not pursued, given the long-term safety and maintenance benefits; Burom countered that undergrounding would cost $1 million per 2,000 feet and that Paradise Valley's experience showed shared-cost models (60% town/subdivision, 40% utility) still burden the community significantly.
4. Due process and time constraints: Whispering Hills representatives argued that they had been delayed in exploring options and requested only two weeks (May 4 or May 20) to complete negotiations with Phoenix and Southwest Gas, claiming they had recently uncovered new documentation supporting the south-side option.
5. Conspiracy and annexation agreement violations: One public speaker (Daniel Schiebe) alleged that council members had conspired with Kaba Springs developer Mark Staff to build a bridge across Cave Creek in violation of the 1961 annexation agreement and that the transmission line easement was a secondary consideration.
6. Utility company bias: A reference to Arizona constitutional eminent domain powers and public utility commission oversight raised questions about whether the town had leverage to negotiate at all.
7. Environmental and aesthetic concerns: One speaker referenced the Sonoran Preserve and expressed concerns about pole visibility and desert ecosystem impact.

Most compelling arguments: The most legally and practically compelling opposition argument was Suan's detailed presentation of public records showing that Phoenix-owned land on the south side was either reserved (Parcel A) or not annexed into Phoenix (Parcel B, owned by Parks and Recreation), thereby potentially avoiding Phoenix's preservation objections. This documentation suggested that Phoenix Vice Mayor Wearing's position against south-side placement might be reversible if the parcel-ownership and annexation technicalities were clarified. Suan's appeal was bolstered by Whispering Hills' demonstrated commitment: they had spent over 100 hours on public records requests, retained legal counsel, and engaged consulting experts (surveyor, assessor). However, Burom's response—that neither Phoenix, the state land department, nor APS had indicated willingness to move the line despite multiple inquiries—undermined the feasibility of relocation regardless of property ownership. Burom stated plainly:

"There is no resolution to the Whispering Hills desire to move the land from the line onto someone else's land on the south side of the property of the highway and everybody who has land there has apparently communicated their position that the answer is no." — Richard Burom, Town Attorney

Organized groups: Whispering Hills homeowners organized informally under their community association leadership, with Karen Tomaine as primary speaker and Bill Suan as attorney. No formal opposition group is named in the transcript.

Support

Number of speakers in favor: No speakers explicitly supported the APS settlement during public comment; council members during deliberation implicitly supported it on public-health and infrastructure grounds.

Main arguments for approval:

1. Critical infrastructure necessity: The redundant 69-kilovolt line provides failsafe power service to all of Cave Creek, preventing cascading failures of the water system if the primary substation goes offline during peak demand (summer).
2. Town negotiated favorable terms: A $50,000 settlement was double or triple APS's initial appraisals, and the modified easement restricted use to a single line, preventing third-party fiber-optic or telecommunications leasing, which would have been standard under APS's initial easement form.
3. No alternative locations: Multiple council members and the town attorney confirmed that Phoenix, the state land department, and APS had all declined to relocate to the south side, and no willing property owners on the south side existed to grant easement rights.
4. "Now or never" settlement deadline: APS represented that the $50,000 offer and favorable easement form were contingent on immediate acceptance, implying that delay risked the collapse of negotiations and potential litigation costs exceeding the settlement.
5. Economic fairness: The 1.2-acre strip was primarily floodplain and flood-way, with limited utility for any other use; $50,000 represented reasonable compensation.

Organized support: No organized support group is identified in the transcript. Council members, the town attorney, and APS representatives provided the primary supporting testimony.

Kaba Springs Revitalization District Formation

Timeline

Applicant presentation (Mark Staff, Kaba Springs developer; Fred Rosenfeld, Bond Counsel):

Mark Staff, representing the Kaba Springs development entity, presented Resolution 2015-3, which initiates the formal process to form a Revitalization District (RD) for the Kaba Springs project—a 982-acre development including 230 residential lots, infrastructure, and public improvements. Staff explained that the revitalization district is a special-district financing mechanism that allows the developer to issue bonds to fund infrastructure (water lines, roads, drainage, parks) without direct town involvement or oversight. The district differs from a Community Facilities District (CFD) in that it severs town board oversight; under a CFD, the town might appoint board members or retain approval authority, whereas under an RD, the developer controls the three-person board, and the town has no role except to approve district formation.

Staff emphasized that this project had been in planning since approximately 1999–2000 and involved annexation of northern acreage, gifting of approximately 700 acre-feet of water supply to the town, negotiation of line-extension agreements with Cave Creek Water Company (later acquired by the town), and significant prior negotiations with town counsel. He confirmed that the property had been held by his group for approximately 30 years and that the original 1,000-acre project had been reduced to 230 lots due to economic constraints and regulatory requirements.

In response to allegations that the project would connect via bridge across Cave Creek to other properties east of town, Staff made an explicit public statement:

"There's been blogs, there's other things, we have zero desire, we have no plans, have never had plans, have no desire to have plans to build a bridge or a connection across Cave Creek to connect with Kaba development. The Kaba Springs development has nothing to do with the other properties we own east of town. But for some reason somebody continues to put forth this idea that we're intending to connect them and drive people from I-17 over the east side of Carefree. Patently untrue, never has been true." — Mark Staff, Kaba Springs developer

Fred Rosenfeld, Bond Counsel from Robert Morris, PLC (the firm's preferred name per canonical roster), addressed council concerns about the RD structure. He clarified that an RD is a purely financial device—a mechanism for issuing bonds to fund infrastructure improvements that will be constructed to town specifications and then gifted to the town upon completion. The three-person board of an RD consists entirely of the developer and its representatives and does not include town officials, municipal staff, or elected representatives. This differs from a CFD, where the town retains a possibility of board involvement and ongoing oversight.

Rosenfeld explained that the historical progression of special-district law moved from Improvement Districts (which created municipal liability if assessments went unpaid) to CFDs (which eliminated municipal liability but retained town control) to RDs (which eliminate both liability and control). He noted that RDs are newer and less common in Arizona than CFDs but have grown in popularity because they allow developers to assume full financial responsibility without municipal entanglement.

In response to Vice Mayor Lar's question about the risk of the district defaulting and exposing the town to moral or ethical pressure to rescue residents, Rosenfeld stated plainly:

"The town is not an obligor or a guarantor on the bonds. That's why you don't do an improvement district, another set of initials—an ID—because that creates potential ultimate liability for the town. The question really is balancing distance, theoretical distance, and having a finger pointed at you versus wanting some kind of control and oversight over this payment structure and how it plays out." — Fred Rosenfeld, Bond Counsel, Robert Morris, PLC

Rosenfeld drew an analogy: the RD bond structure is equivalent to a developer obtaining a bank loan and putting liens on each lot; the bonds simply break that single loan into individual assessments on individual lots, with the developer responsible for paying assessments on unsold lots until sale. Once lots sell, homeowners assume the assessment obligation. If a homeowner defaults, the property is sold to recover unpaid assessments—a standard foreclosure mechanism.

Staff recommendation: The Town Attorney (listed in the brief as Richard Burom) deferred detailed comment, noting that Bond Counsel Rosenfeld and the Finance Counsel (Fred Rosenfeld, who was unavailable at this meeting) typically handle special-district formation and bond opinions. Burom stated that the distinction between a CFD and an RD was important: CFDs involve town board oversight and potential town involvement, creating the appearance (whether justified or not) of town protection for property owners, whereas RDs deliberately sever that relationship, leaving property owners relying solely on the developer's financial viability and the market. He cautioned that some council members and staff had previously preferred the CFD structure precisely to maintain that minimal oversight, but acknowledged that the RD approach is increasingly popular nationally because it eliminates political pressure on municipalities to intervene if a district encounters financial difficulty.

Public comment: Approximately twelve public speakers addressed the revitalization district, with strong concerns raised by several residents and economists about the structure, water supply sufficiency, and potential for creating a separate enclave within the town.

An economist identified as Smith (first name not stated in transcript) cited academic literature from 2007 law journal articles discussing legal and financial problems associated with special districts similar to RDs. Smith argued that the district structure creates a separate taxing authority (the assessment) on 230 lots, grants the developer/board full control over land-use decisions within the district, and that historical experience in Texas, New Mexico, Colorado, and Florida shows that property values in such districts are reduced by approximately 50% of the capitalized cost of the assessment. Smith questioned why anyone would purchase a lot in a district subject to assessments when equivalent properties outside the district do not carry that burden. Smith also noted discrepancies between legal descriptions in Resolution 2015-2 and the maps presented to council, suggesting documentation gaps.

Daniel Schiebe, a Cave Creek resident, alleged that the revitalization district formation was a mechanism to enable bridge construction across Cave Creek in violation of the town's 1961 annexation agreement. Schiebe detailed a scenario in which the district, under RD law, can acquire property outside its border if such acquisition provides a "benefit" to the district, and can construct infrastructure outside the district border if similarly justified. He identified a 30-acre parcel west of Cave Creek (east of Morning Star Road and Old Stage Road) already owned by Mark Staff's entity (Morning Star Road Properties, Inc.), which would be the ideal location for a bridge crossing. Under this theory, the district could acquire the parcel, construct a bridge to it (outside the district border but with purported benefit to the district), and Staff would avoid direct violation of the annexation agreement because the bridge would be constructed by the district rather than by Staff or a Staff entity:

"Staff Town can acquire the 30 acre parcel as part of Staff Town, and even though a bridge over the creek is a violation of the annexation agreement Mark Staff is not a party to the annexation agreement. Our Town Council cannot require Mark Staff's compliance with the annexation agreement because Cave Creek has no governing authority over Staff Town once it gives final approval of the resolution." — Daniel Schiebe, Cave Creek resident

Schiebe further argued that an RD's required "enhanced municipal services" must be installed within the district boundary, and that the plans show no infrastructure within the Kaba Springs district—only outside it—which would constitute a violation of RD law. He concluded that the council, by approving the resolution despite "foreknowledge" of Staff's intent to violate the RD statute and the annexation agreement, would expose the town to future litigation by residents or third parties.

Bruce McNeel, a 15-year resident, echoed concerns about the town's lack of expertise in evaluating the RD structure and reiterated his earlier suggestion that developers seeking special-district approval should be required to pay consulting fees to allow the town to retain independent legal counsel.

Ty Fritz, a resident of the Kaba Springs area for 35 years, recalled that the town's 1990s annexation of northern acreage (the area that became Kaba Springs) occurred under an agreement with then-property-owner Tom Lamb that the zoning would be at least 5 acres per lot. Fritz contended that the RD structure effectively transfers zoning control from the town (and townspeople) to a three-person developer-controlled board, thereby violating the original annexation compact. Fritz stated:

"You guys came in for your protection... it sounds to me is you'd be giving our rights as voters over to three or four people on this board which is a corporation the say of how they're going to zone that out there, how close they're going to put their houses and stuff. I can't agree with that." — Ty Fritz, Cave Creek resident

Lyn Jackson, an 18-year Cave Creek resident, raised concerns about precedent: if the council approves an RD for Kaba Springs, will it set a precedent for future developers, and will multiple RDs throughout the town effectively erode the character of Cave Creek by creating multiple insulated districts over which the town has no influence?

A resident (name not clearly stated) expressed concerns about infrastructure costs and long-term exposure, questioning whether infrastructure would be installed inside the district boundary (as required by law) or whether it would be strategically located outside to avoid benefit to non-district residents and thereby provide justification for the bridge crossing.

Another speaker acknowledged the project's long development timeline and legitimate need for financing but requested an informal town-hall meeting (separate from the council meeting) where residents could ask questions of Staff, the bond counsel, and town officials without debate, allowing residents to gather facts before reaching conclusions.

Council discussion:

Vice Mayor Lar questioned whether the RD structure was essential to financing the project or whether a CFD would accomplish the same infrastructure development while maintaining town board oversight. She raised concerns about creating a "town within a town" with separate governance and asked whether the town council had "foreknowledge" of any plans that would sever the district from the rest of the community. Staff responded that he preferred the RD structure because it isolated the developer and future residents from town involvement in the financing mechanism, thereby protecting both parties: future residents would not rely on the town for financial oversight (reducing future claims of town responsibility), and the developer would not face town interference in district governance.

Mayor Francke expressed sympathy for the dual concerns: the town wants to see the project succeed and provide water to west-side residents who currently rely on dry wells, but the council also has an obligation to understand the legal structure and to maintain adequate safeguards. He invited Rosenfeld (the absent Bond Counsel) to attend an informal town-hall meeting within two weeks to discuss the RD structure in detail.

Councilman McGuire raised a more pointed question: if the revitalization district's legal structure allows the developer to acquire property outside the district and construct infrastructure (including a bridge) outside the district boundary if such construction benefits the district, is there a legal mechanism by which the council can prevent such construction? Rosenfeld, anticipating this concern, reiterated that an RD is purely a financing device and that all town zoning laws, ordinances, and land-use regulations apply equally within and outside the district. Therefore, if the council wanted to prevent bridge construction across Cave Creek, the council would reject any plat or site plan that included such a structure, regardless of the RD status. However, Rosenfeld acknowledged that the RD form creates a legal distance between the town and the district that did not exist under a CFD, and that this distance could complicate the town's ability to assert control.

Councilman Bunch, supporting the project, noted the long timeline (26 years since initial conceptualization, 22 months of recent council involvement) and the benefit to west-side residents lacking piped water. He emphasized that the project had been studied extensively and that the council should move forward, with the understanding that additional hearings and community input sessions would follow during the formal district formation process.

Vice Mayor Lar, while concerned about the RD structure, stated her support for continuing the process, in part because an RD isolates the town from financial liability and because the district's bylaws and governance could be refined during subsequent hearings.

Councilman McGuire, expressing his longest statement, noted the newness of the RD statute in Arizona and the fact that he himself had attempted to form an RD in the past but failed because a bond counsel would not issue an opinion. He stated that he did not trust the newness of the mechanism and preferred the CFD structure, which has a longer track record. However, he acknowledged that Rosenfeld has more experience than the council and that the bond-counsel opinion is an independent professional judgment. He stated his support for moving forward but reserved the right to revisit the structure if subsequent hearings revealed material risks.

Councilwoman Clancy asked for an explanation of the RD statute and its application to the Kaba Springs project. Rosenfeld provided a detailed tutorial on the difference between an RD and a CFD, the financing mechanics, the role of the district board, and the town's ability to enforce zoning and land-use regulations even within an RD. He emphasized that the RD is a financing device and does not create a separate jurisdiction or constrain the town's police powers.

In response to continued concerns about water supply, Staff acknowledged that the project requires a 100-year assured water supply from the Arizona Department of Water Resources (ADWR) and that the developer had previously gifted substantial amounts of grandfathered water rights to the town as part of the line-extension agreement negotiations. He stated that the project is "completely compliant" with water law and that the town's acquisition of the water company had been simultaneous with the annexation and development-agreement negotiations, allowing the developer to vest water rights through the line-extension agreement and to donate excess water to the town.

Vote: Resolution 2015-3 was approved by a vote of 6-0. The council voted to approve incorporation of the revised legal description of Parcel 3 (identifying Morning Star Road Properties, Inc. and the specific tax parcel number) into the motion. Individual votes by name were not recorded in the transcript.

Opposition

Number of speakers against: Approximately 7 speakers raised significant concerns about the RD structure, water supply, and potential bridge construction; additional speakers requested continuance or further study.

Main concerns:

1. Loss of town oversight: The RD structure eliminates town board appointment rights, creates a developer-controlled board, and severs the town's ability to exercise ongoing governance or financial oversight. This contrasts sharply with a CFD, under which the town retains board-appointment power and can maintain a voice in district governance.
2. "Town within town" creation: Multiple speakers expressed concern that the RD creates a separate jurisdiction-like entity within the town, with separate land-use decisions, separate financing, and separate governance, effectively carving out a portion of the town and placing it beyond town control.
3. Property-value impacts: The economist speaker cited academic literature suggesting that property values in special-assessment districts are reduced by 50% of the capitalized assessment cost, raising questions about why anyone would purchase a lot in Kaba Springs when equivalent lots outside the district avoid that assessment.
4. Water supply insufficiency: Public speakers and council members raised concerns about whether the town's water supply is adequate to support both the APS transmission line (which requires water for construction and future cooling) and the 230 new residential lots in Kaba Springs. One speaker noted that even with 368 acre-feet of water from the Central Arizona Project (CAP), the town's existing supply is constrained, and the cost of purchasing additional water is prohibitive.
5. Bridge construction conspiracy allegations: Daniel Schiebe presented a detailed legal analysis arguing that the RD structure would permit bridge construction across Cave Creek via acquisition of the Morning Star Road Properties parcel, thereby violating the 1961 annexation agreement while insulating the town from direct liability.
6. Infrastructure location and RD-statute violations: Questions were raised about whether infrastructure is being located inside or outside the district boundary and whether the district is in violation of the requirement to provide "enhanced municipal services" within the district.
7. Discrepancies in legal documentation: One speaker noted that exhibit maps and legal descriptions in the resolution do not match, suggesting either carelessness or deliberate ambiguity.

Most compelling arguments: The most troubling argument from a legal-exposure perspective was Daniel Schiebe's detailed analysis of how the RD structure and the developer's ownership of the Morning Star Road Properties parcel create a mechanism for bridge construction that would violate the annexation agreement but would not expose the town to direct liability because the bridge would be constructed by the district (not by the developer) and would be justified as infrastructure providing benefit to the district. Schiebe's argument was reinforced by Fred Rosenfeld's own acknowledgment that RDs sever the town's oversight and that infrastructure can be located outside the district if it provides a benefit. Even though Rosenfeld argued that the town's zoning and land-use powers still apply, the practical difficulty of asserting such power against a developer-controlled district board was apparent from the discussion. The economist's argument about property-value depression, while speculative, raised legitimate market-analysis concerns that none of the council members directly rebutted.

The water-supply argument was also compelling, particularly given Mayor Francke's own opening statement that Cave Creek has limited water supply and that the cost of purchasing additional water is prohibitive. Council members acknowledged but did not fully resolve this tension.

Organized groups: No formally organized opposition group is identified; concerns were raised by individual residents and technical experts (economist, attorney/planner).

Support

Number of speakers in favor: No speakers explicitly supported the RD formation during public comment; council members expressed support during deliberation.

Main arguments for approval:

1. Long-overdue development: The project had been in planning for 16+ years with recent intensive negotiations; approval would allow the project to proceed and bring economic development to the town.
2. West-side water benefit: The project includes a water line extension to west-side residents currently on failing wells, which is a substantial community benefit.
3. Developer assumes financial risk: The RD structure places the developer (and ultimately lot buyers) in the position of loan obligors, with the developer responsible for paying assessments on unsold lots until sale. This aligns the developer's incentives with project success and eliminates town financial exposure.
4. RD isolates town from liability: While an RD severs town oversight, it also eliminates the potential for residents or third parties to claim the town is responsible for district financial failures, thereby protecting the town from future litigation.
5. Zoning laws still apply: All town zoning, land-use, and ordinance authority remains effective within the district; the town has not surrendered police powers.
6. Industry precedent: Rosenfeld cited multiple successful CFD and district-financed projects (DC Ranch, Scottsdale, Mountain, McDow Mountain Ranch, Verrado, Festival Ranch) as evidence that the financing structure is viable.

Organized support: Mark Staff and his development company provided the primary support, along with Bond Counsel Rosenfeld. Council members Bunch, McGuire, and Lar (in deliberation) provided qualified support, contingent on further hearings and community engagement.

Project Details

Case number: Resolution 2015-3 (or R 2015-3, as cited in the transcript)

Applicant / developer: Mark Staff, representing Kaba Springs development entities; the brief identifies the entities as including Morning Star Road Properties, Inc. (which holds the 30-acre parcel west of Cave Creek).

Attorney: Fred Rosenfeld, Bond Counsel, Robert Morris, PLC; Bill Suan, attorney for Whispering Hills (representing the opposing community in the APS matter).

Location / address: Kaba Springs, Cave Creek, Arizona; the project area includes a 30-acre parcel east of Morning Star Road and Old Stage Road, west of Cave Creek. APS transmission line crosses north side of Carefree Highway near 40th Street.

APN (if stated): The revised legal description incorporated into the motion identifies Parcel 3 as "that portion of the Southwest Quarter Northwest Quarter of Section 13, County 6 North Range 3 East of the Gila and Salt River Base and Meridian, Maricopa County, Arizona lying south and west of Tract A, Gaba Springs Phase One according to Book 873 Maps page 42 records of Maricopa County Arizona. County par 2-8-4 D." (As read into the record by Vice Mayor Lar.)

Current zoning → Proposed zoning: Zoning details were not specified in the transcript; the project was described as involving approximately 982 acres, ultimately reduced to 230 residential lots.

Density / units / square footage: 230 residential lots on 982 acres.

Changes from previous version (if reconsideration): Resolution 2015-3 repealed Resolution 2015-12 (mentioned in the meeting agenda). Minor modifications to language were made at the request of Town Attorney Burom to address his concerns. The revised legal description of Parcel 3 was added "at the last minute" to clarify tax-parcel identification.