Cave Creek Continues Cahaba Springs Revitalization District Over Statutory Defect

Cave Creek Narrowly Averts Legally Defective Revitalization District Vote; Procedural Flaw Exposed Before Approval

At its April 26, 2016 meeting, Cave Creek Town Council voted unanimously to continue the Cahaba Springs Revitalization District resolution to June 15, 2016, after Attorney Timothy Lasota identified a critical statutory defect: the resolution lacked the date, time, and place of the required public hearing—fields left blank and signed by the mayor in violation of Arizona Revised Statutes Section 48-3702. The procedural mishap, caught on the eve of a final vote, exposed a governance gap and temporarily derailed a contentious development project that has sharply divided west-side residents.

Key Speeches

"Looking at the resolution if you look at page 3… you notice that it says a public hearing on the formation of the district shall be held on blank 2015 at 6pm there's nothing there. This resolution was signed by the mayor as approved by the town [on] 3/22/2015… The statute which should be coming next states the resolution shall state the following: the date time and place of the hearing to be held on the formation of the district. This resolution as you can plainly see does not state that. I would say it's not effective." — Timothy Lasota, Attorney for Eileen Rights

"If you go down the road this entity forms it starts assessing taxes it starts assessing user fees it starts doing those things it's empowered to do by statutes… what happens down the road someone sues and says this district was never lawfully formed the directors if it wasn't lawfully formed they may be on the hook personally to disgorge the funds that have been raised under the color of a governmental entity that does not legally exist." — Timothy Lasota

"The resolution self shall state the following the date time and place of the hearing to be held on the formation of the district the resolution does not state that it's pretty simple and I think that this council should reconsider its efforts to implement a special taxing district within its own borders especially since it's not done so legally." — Timothy Lasota

Town Attorney (Mr. Birnbaum) acknowledged the statutory requirement but hedged: "I think it does have and I think we should have filled it in frankly the effect of that would go to whether or not emotion set the date because at the time it wasn't clear the way when it was going to be filled in so i would think that the motion would have to have set today and then we would… I cannot directly answer that question right now."

Timeline

• Applicant presentation: Fred Rosenfeld served as hearing coordinator and procedural moderator. He outlined format: opposition speaks first, then proponents. He noted that legal arguments from each side should be responded to by the other. No formal applicant presentation occurred; the hearing was structured as a public comment forum.

• Staff recommendation: Town Attorney Birnbaum confirmed the blank-date defect but requested two days to research whether the resolution could be amended before adoption or had to be re-agendaed. No staff recommendation on the merits of the district was presented.

• Public comment: Approximately 8–10 speakers, including opponents Jane Roads, Jackie Davis, and proponent Jackie Washington (with property on the west side). Opposition dwelt on water access, infrastructure costs, and traffic; proponents emphasized the only pathway to west-side water service. Time unknown.

• Council discussion: Councilman Lipsky and Councilwoman Clancy championed the district on grounds that it enables water-line extension to west-side properties. Lipsky noted: "I think this particular issue has been somewhat of a matter of years now start with the last year its transparency is the ability to see what your local governments do it." Council members appeared sympathetic to the development's water-infrastructure objective but deferred to the legal defect identified by Lasota.

• Vote: Motion to continue item to June 15, 2016, pending legal correction. Vote was unanimous (6–0). No individual votes broken out in transcript.

Opposition

Number of speakers against: Approximately 5 speakers against or expressing serious concerns.

Main concerns:

1. Statutory violation / personal director liability: Resolution signed with blank public hearing date field, violating Arizona law (A.R.S. § 48-3702) requiring explicit statement of hearing date, time, and place. Failure to correct exposes district directors to personal liability for funds collected by unlawfully formed entity.

2. Water infrastructure uncertainty: Jane Roads (resident on west side) expressed concern that despite drought conditions over four years, it was unclear whether the town would guarantee west-side water service if the district failed. She asked council to commit in writing that the town would fund alternative water-delivery mechanisms (e.g., lines along roads) if the district was not implemented.

3. Traffic congestion: Roads and Jackie Davis cited concern about 200–400 daily vehicle trips from the development on Route 26, a limited two-lane corridor. Davis noted that the property has only one in-and-out access point.

4. Financial viability: Roads, trained as an actuary, stated she had "life concerns" about the financial proposal underlying the district and wanted council to obtain full data before approval. She questioned whether the town had complete cost and revenue projections.

5. Project history and due diligence: Marie Smith (resident) emphasized that decisions on contracts and services should be based on independent analysis, not material prepared by the applicant. She noted the only cost analysis on the agenda was prepared by Sonoran News (the local newspaper) and urged a full independent third-party analysis before council voted.

6. Corporate petitioner legitimacy: Mary Smith raised concern about transfer of rights between Travis Vegas Development Corporation and John Cahaba/TCS Investments Inc., questioning which entity was actually petitioning for the revitalization district and whether the town's process allowed separate corporate entities to fragment community interests.

Most compelling arguments:

• Lasota's identification of the blank-date field as a plain violation of Arizona's mandatory "shall" language in the statute—a stark, documentary defect that could not be argued around.
• Roads' actuarial skepticism about financial projections and her request for town commitment to fund alternative water infrastructure, framing the district as speculative.

Organized groups: None identified.

Support

Number of speakers in favor: Approximately 2–3 speakers.

Main arguments:

1. Water access the only pathway: Jackie Washington, a resident with property on the west side, emphasized that the revitalization district is the only practical mechanism to fund and install water lines to west-side parcels. He noted: "I have waited years and years since the springs again but I do support it." He stated that without the district, residents would have to rely on the town to fund water infrastructure—an uncertain and potentially more expensive alternative.

2. Roads and infrastructure: Washington noted that the district enables not only water lines but roads on the west side. He stated that roads and water are "what I understand and they're giving it turn it over to the town panel doesn't have to pay for the water account and then have to pay for the roads."

3. Proponent concern about council commitment: Washington asked council members to publicly commit that if the district did not go through, the town would fund water-line installation to the west side, framing the district as a reasonable alternative to town expenditure.

4. Extended delay: Washington expressed frustration that the project has "been going on for many years" and asked that the district be approved to move forward.

Project Details

• Case number: Not stated in transcript.
• Applicant / developer: Travis Vegas Development Corporation (original petitioner); also referenced John Cahaba / TCS Investments Inc. (Minnesota corporation) as an assignee or transferee of rights. Corporate structure and exact relationship unclear from transcript.
• Attorney: Not identified for applicant; Brennan Ray (Ray Law Firm) and other counsel may have been involved but did not speak at this meeting.
• Location / address: West side of Cave Creek, south of Route 26 (implied); parcels affected include property of Jackie Washington at 5632 upper road and other west-side residential parcels.
• APN (if stated): Not stated in transcript.
• Current zoning → Proposed zoning: Not stated in transcript.
• Density / units / square footage: Not stated in transcript.
• District type: Special taxing / revitalization district (Cahaba Springs Revitalization District) for water and infrastructure improvements to west-side properties.
• Changes from previous version: Resolution was signed by mayor on March 22, 2015, with blank public hearing date field. No prior version noted in transcript.

Vote Breakdown

• Final: 6–0 (motion to continue item to June 15, 2016).
• Yes: All council members voting (individual names not stated in transcript).
• No: None.
• Abstentions / absences: None noted.

Outcome & Next Steps

The Cahaba Springs Revitalization District resolution was continued to the June 15, 2016 meeting pending legal correction of the blank public hearing date field. Town Attorney Birnbaum requested approximately two days to research whether the resolution can be amended or must be re-agendaed. The item cannot be amended at a subsequent meeting without being placed back on the agenda. Assuming the legal defect is cured, the council will re-hear opposition and support testimony and vote on adoption. Proponents expect the district to enable financing and installation of water lines and roads to west-side properties; opponents seek further financial analysis and town commitment to fund alternative infrastructure if the district fails.

Controversies & Context

Statutory plain language vs. council intent: The defect—a blank date field in a signed resolution—appears to be an administrative oversight, yet Arizona's statute uses the word "shall," leaving no discretion. Attorney Lasota's warning that district directors could face personal liability for disgorging funds from an unlawfully formed entity injected legal gravity into what might otherwise have been a minor clerical correction.

West-side water access crisis: Cave Creek's west-side properties, including residents like Jackie Washington and Jane Roads, have lacked reliable municipal water service for years. The town has not funded water-line extension to that area. The Cahaba Springs district is framed by proponents as the only mechanism to break this gridlock. However, opponents questioned whether the town would commit to fund water infrastructure if the district failed, raising the specter that council approval might be the only pathway to west-side water—creating implicit pressure to vote yes regardless of financial viability.

Development vs. neighborhood impact: Opponents cited traffic impacts (200–400 daily vehicles on Route 26, a limited two-lane road) and questioned infrastructure costs. The property has a single in-and-out access point, intensifying congestion concerns. Proponents argued these impacts are acceptable to achieve water access.

Corporate petitioner legitimacy: The transfer of petitioning rights from Travis Vegas Development Corporation to John Cahaba / TCS Investments Inc. raised questions about which entity was actually driving the project and whether the town's process permitted such transfers without re-vetting the project.

Lack of independent cost analysis: Marie Smith criticized the lack of an independent third-party cost analysis for the district and noted that the only cost data on the agenda came from Sonoran News (the local newspaper), creating a conflict of interest. This echoed an earlier contentious debate (Item No. 8, discussed below) over the town's use of Sonoran News for advertising and public notices.

Duration

• This item: Approximately 60–90 minutes (extended hearing with multiple speakers and legal argument).
• Total meeting: Approximately 180–240 minutes (not fully stated).

Other Notable Items

Publication Selection Dispute — Sonoran News vs. Arizona Republic (Agenda Item No. 8)

In a heated debate earlier in the meeting, the council voted 6–0 to direct the town manager to use Sonoran News for town advertising, despite legal counsel's opinion that the Sonoran News does not meet the statutory definition of a "newspaper" for public notice purposes. Ali Peers (Arizona Republic) presented audited circulation data showing 2,113 subscribers in Cave Creek and challenged claims that the Sonoran News reaches a broader audience. Councilman Lipsky and Councilwoman Clancy argued that the Sonoran News, being a local publication, better serves residents; Lipsky noted it covers town council meetings "almost word for word." Town Attorney Birnbaum cautioned that the motion, as stated, could violate A.R.S. § 39–201 et seq. by directing public notices to a non-qualified publication. The council ultimately approved the motion to use Sonoran News for advertising (not explicitly public notices), but the ambiguity raised concerns about whether the town intended to circumvent the statutory requirement for qualified newspapers. This debate reflected underlying tensions over media favoritism: Sonoran News had supported council members in a recent recall election, and critics alleged the decision was payback. Carrie Smith urged the council to wait for an independent cost analysis before changing publications.

GL Patty Reservation Abandonment (Agenda Item No. 5)

The council voted unanimously (6–0) to abandon a portion of the GL Patty Reservation (a federal land grant easement) south of Bolton Road and east of Cave Creek Road. Property owner Peter Hausen requested removal of the traverse easement to complete a wireless development site plan approved in October 2014. No opposition was noted. The vote was routine and uncontested.

Resident Complaint About Council Responsiveness (Public Comment)

Jane Roads expressed frustration that council members appeared more cordial and friendly to staff and applicants than to residents providing public comment. She questioned whether decisions were predetermined and asked for simple acknowledgment of citizen input. Roads noted: "I don't understand the time is tight in these meetings but what I would ask that is for just the courtesy of a thank you… Give us some kind of acknowledgement that you actually hear us when we out here get over to speak." She expressed concern that the council might be disregarding residents out of arrogance, lewdness, or lack of time. No council member responded substantively.

Rope Tow Event Safety Concerns (Public Comment)

Jackie Davis and Jane Roads expressed concerns about motorcycle rope tow special events creating traffic congestion, emergency vehicle blocking, and safety hazards, contrary to the town's stated goals of community safety and pedestrian/equestrian pathway protection outlined in the town plan. Davis noted the events conflicted with stated guiding principles emphasizing safe, efficient, and aesthetically pleasing transportation and pedestrian priority. No council action was taken.

Whispering Hills APS Underground Utilities (Public Comment)

A resident provided a lengthy statement regarding frustration over an "unseemly rush" to issue a permit for the Whispering Hills project, noting that documentation took six months to reach council while permits were issued in days. The resident questioned why an alternative route (along a new road) was not chosen and noted ongoing concerns about APS utility routing. The matter remains unresolved.