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Bambi
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| Joined: | Tue Sep 19th, 2006 |
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| Posts: | 2260 |
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Posted: Sun May 4th, 2008 05:15 pm |
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Well Jeff. Still glad you became a councilman? Your playing with the "big" boys now. Full disclosure? Transparancy? Judgment calls? deal makers/breakers? Who participates and approves?
Would it have made a difference if the agreements had been "fully" disclosed?
How could it have been more "clearly" laid out? Adopt that procedure.
So, the additional $400,000. for the next 8 years....what will the additonal expense per household be? What is the "projected" average bill, including the additional amt. for the developers agreements going to be? That's what should be disclosed in my opinion. What's the cost to the taxpayer per month. They must "budget" these days.
I predict, based on other's predictions, that we will be back on track in housing by 2009......that only means more money out of pocket for you guys, but be prepared. My prediction is per the real estate industry soothsayers. But, it is already "picking" up out here, as we reaching the bottom of the foreclosure market....they are selling like hotcakes...deplete that market and builders are back in business....lenders?
Jeff. You know how to ask the right questions, so you will be an asset to your community in future negotiations.
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QCVillager
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Posted: Sun May 4th, 2008 03:56 pm |
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This is exactly the type of thing that bothers me no end.
The support for buying the water company from Town's folk was based on... "hey, we would like to control our own destiny. this water company is owned by a private entity and that entity has given us right of first refusal. and hey, this is a good deal and value for the Town of Queen Creek and it will cost $37m."
I firmly believe that most Council members and most of the public remembers that buying the water company was going to cost the Town and therefore it's taxpayers... $37m.
Well, now we find out that it will ACTUALLY be somewhere between $39m and $51m. (by the way, that doesn't factor in the debt service or interest on the $37m low interest WIFA loan)
I am not contradicting the Mayor or Patrick Flynn when they say that there was nothing wrong with QC Water Company doing the developer agreements and that it was a good deal for the QC Water Company. Indeed, it was. It was a very sound decision and judgement to do so for them.
What I am upset about is that the TRUE and TOTAL costs to the taxpayers of the Town of Queen Creek to buy QC Water Company should have been more CLEARLY laid out. The $37m figure that was bandied about so frequently is now painlfully obvious not the TOTAL and TRUE cost.
So... what is the Total and True Cost ? well, we just don't know exactly since the slower the growth between now and xxx the less it will cost the Town. But according to Paul Gardner's quote there will still be 65 developer agreements in place after 2012. Does anyone think we'll still be in a housing permit slowdown after 2012 ?
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CrimeFighter
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| Joined: | Sat Feb 10th, 2007 |
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| Posts: | 575 |
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Posted: Sun May 4th, 2008 03:32 pm |
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| Ha ha ha, this just makes the point of my conspiracy theory.
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QCVillager
Member
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Posted: Sun May 4th, 2008 03:31 pm |
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Q.C. water paybacks may get pricey
Firm’s deals with developers come with town’s purchase
By SARAH J. BOGGAN TRIBUNE
Queen Creek spent nearly $37 million to buy Queen Creek Water Co. but now taxpayers are on the hook for millions more to fulfill developer agreements the private company used to expand the system.
The company entered into “mainline extension agreements,” which allowed developers to come to town, put in water infrastructure needed for their projects and recover a small fraction of their costs, said Paul Gardner, Queen Creek water director.
“At the end of the day, because of where the rate structures are, the developer gets back 25 to 40 percent of what they put in,” Gardner said.
The agreements generally last 10 years, with the developer being paid from a percentage of water proceeds coming from their project. There are 130 agreements in place right now, Gardner said.
“We are required to pay the developers back what the company owes them,” said Assistant Town Manager Patrick Flynn. “It was a good deal for the company when they did this — they got millions in infrastructure and what they pay back is ultimately less than that.”
Councilman-elect Jeff Brown said learning taxpayers could be liable for more than the water company purchase price is “shocking.”
“It’s almost a bait-and-switch situation,” Brown said. “You’re quoted one thing on the showroom floor and then in the finance office it’s a different situation.”
Brown said Town Councils make decisions based on cost and he is concerned if the council did not have all of the information or if it was glossed over. The situation could lead to public mistrust, he added.
Mayor Art Sanders said the information is not surprising and was discussed during the water company purchase.
“All of those discussions were there,” Sanders said. “There’s nothing sneaky about any of this. The water company was wise to do this because when the developer leaves, the water company owns the infrastructure.”
When the town purchased the company at the end of March, the town negotiated so that two years of the developer payments come from the company — about $850,000. That should cover the financial obligation through fiscal year 2009-10, Flynn said.
Town officials anticipate paying out about $400,000 a year for the eight remaining years, but that amount could be more should development begin to increase again.
Gardner said the town could potentially have to pay back between $13 million and $14 million to developers, but with a development downturn, the town might only have to pay between $2 million and $3 million.
Some of the agreements expire each year and the town will never enter into another one, Gardner said.
“By the time the town gets out to 2012 there probably will be only about half of those agreements left,” he said.
Gardner said covering the agreements was an important part of getting Arizona Corporation Commission approval of the sale of the company to the town.
“This transaction would have been harder to complete if we hadn’t taken care of it this way,” he said.
But with the water company in public hands, now town officials can decide to pay the agreements until they expire, or they could negotiate with developers to pay off sooner.
“The town could negotiate to pay off the obligation at a lower cost to the town and the developer may want it just to close it out,” Gardner said.
Queen Creek took out a $40 million loan from the Water Infrastructure and Finance Authority of Arizona at 4 percent interest — the extra money beyond the purchase price is for system repair and maintenance.
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