"Thomas Jefferson said a democracy is dependent on an informed citizenry.  I don't care whether it sounds corny or not.  It's the truth." -Jim Lehrer

Carefree Truth
Issue #834, June 19, 2020

During the approval of the Consent Agenda, Councilman Gene Orrico questioned the arbitration payment made the previous month.  "I know it's about the water."  Mayor Les Peterson explained that there were other items as well that were included in the legal bills.  Mr. Orrico asked if the engineering company hired by the Town would ever give a firm cost for the water.  The Mayor asked Gary Neiss to address Mr. Orrico's question.


Mr. Neiss explained that the Town is starting an arbitration process.  Leading up to arbitration, expert reports are exchanged and quite a bit of legal work is being done.  The receipts validate what's being done towards the solution to issues Carefree residents want the Town to address.



The arbitration process started with the exchange of valuations.  The Council has received documentation in association with Cave Creek's and Carefree's valuations.  Carefree's is based on the contractual agreement Carefree has with the Town of Cave Creek.


Mr. Neiss noted, "Cave Creek's is based on some interesting math: 90% of the value that they originally paid for the water company, for less than 20% of a portion of an aging distribution system.  So it's very questionable when you look at it on the surface.  When you do a deep dive, it's even more questionable."


"Our experts are now doing a deep dive into their respective reports and exposing those respective seams.  Their experts are obviously reviewing our reports.  They'll be an exchange of information and a cross examination of the expert witnesses leading up to an arbitration process."


"As a result of Covid, we're probably looking at a delay in that process to October at this point in time, but that hasn't been verified yet.  But most likely, that arbitration process will begin in October.  This is all leading up to that arbitration process.  We are making good headway on this issue." 



"And as far as reconciling the numbers, once we have the final numbers from the arbitrators, we compare that with our respective engineering and get an overall value.  But right now, it's premature to release that information until we get through the arbitration process, so we have to be patient in all this.  Obviously, there are legal strategies behind what we're doing and behind what Cave Creek's doing, and we've got to respect that process."


Mr. Orrico asked if the appraisal fee for 5 properties was part of the water situation.  Mr. Neiss confirmed that.  Mr. Orrico supposed that part of Sherman Howard's bill was also part of the water situation.  Mr. Neiss replied that there was some overlap, but there were also other legal issues that Sherman Howard was working on for the Town.


Mayor Peterson said if any Council members have questions, they are welcome to stop by Town Hall.  He noted that, "Many of the legal fees and the related fees are driven by the posture being taken by our adjoining municipality".  He felt it was regrettable.


There being no further questions, the paid bills were unanimously approved.

https://vimeo.com/425373618


Lyn Hitchon


Prepared by Carefree Truth
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