"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 #847, August 7, 2020

Mayor Les Peterson said, "Carefree is currently in the process of bringing the remaining areas of Carefree which receive their water from the Cave Creek Water Company into the service area of the Carefree Water Company.  In order to do so, and after an extensive search process, Carefree hired a very experienced attorney to lead Carefree's efforts through this process.  This attorney is Mr. Christopher Kramer, who is on the video with us this evening from the law firm of Jennings, Strouss & Salmon, P.L.C. (JS&S)"
 
 
The Mayor asked Mr. Kramer to introduce himself and provide an overview of his considerable experience in condemnation and acquisition activities, and to provide an update on the water acquisition process.
 
 
Mr. Kramer stated that he has been practicing law for 34 years.  For the last 21 years, he has practiced condemnation law exclusively.  You can view his attorney profile on the JS&S website.  Highlights of which he is particularly proud include (1) co-chairing  the Arizona Condemnation Summit (ACS) since 2007.  The ACS meets twice a year.  Last spring would have been number 25.  It brings together those who practice or have a specialty related to condemnation, for Continuing Legal Education and Continuing Real Estate Education.  It brings them together to "break bread together so everyone knows everyone else.  It's a lot harder to be a jerk to someone that you just had lunch with last week than someone you only know by email and telephone".  "It results in a collegial practice in Arizona that is unusual and unique." (2) He has been a member of the Eminent Domain Land Use Committee of the National Academies of Science, Engineering and Medicine since 2014.  This year, he was appointed to chair that Committee.  He is also a member of the Legal Resources Council for the Academies through 2022, and they have asked him to stay longer.

 
 
Carefree's evaluation team includes financial analysts and engineers to assist with the project in terms of disconnecting the Carefree Service Area (CSA) from the Cave Creek system and connecting it to the Carefree system.  The principal helper with this evaluation is Rick Giordina, who is the president of Raftelis, and with whom Mr. Kramer has worked before.  Mr. Giordina has over 40 years of experience at valuating and evaluating water and waste water systems.  You can go online and see his very lengthy resume.  He is a CPA who holds a series 50 municipal adviser certification from the Securities and Exchange Commission (SEC), which allows him to advise municipalities on such matters as debt issuance and capital structure, which are particularly relevant to the valuation of the utility in this case.
 
 
The engineering is led by Coe Van Loo (CVL), a homegrown Arizona company that has been here for about 60 years.  Mr. Kramer has also worked with them before on condemnation projects around the state.  CVL works in the western states and in some states east of the Mississippi River as well.  CVL has a lot of experience doing water and waste water projects.  Carefree is fortunate to have Tracy Grunden, who heads up the water and waste water practice for CVL for the entire U.S.  He is a very impressive man.  He will not only be doing the evaluation and engineering, but will be doing the actual work.  He will be testifying for Carefree.
 
 
Cave Creek has also hired a team of experts with the same general disciplines.  Each Town had their respective experts produce reports which have been exchanged, after which the teams were asked to produce rebuttals referencing where they agreed and disagreed, and why.  This was completed on July 24th.  These reports are available online.

Raftelis Report:

https://www.carefree.org/DocumentCenter/View/3283/Raftelis-Carefree-Rebuttal-Report---FINAL

CVL Report:

https://www.carefree.org/DocumentCenter/View/3284/CoeVanLoo-Rebuttal-of-Gannett-Fleming-Report

***** Click on the Report Titles or  Copy and paste the links to read the reports.

Mr. Kramer didn't want to get into anything that could compromise attorney/client privilege.  He stated that this was not a forum where those questions could be answered.  Questions from Council members could be addressed to the Town Attorney or the Town Administrator in a privileged forum.
 
 
There is a significant difference of opinion between the Carefree and Cave Creek experts.  This is not unusual.  It happens all the time in condemnation cases.  "If it didn't, I probably wouldn't have a job."  It is rare in condemnation cases where either side gets its exact number.  It has only happened to him once in all the years he's been doing this.  There is a common misconception that this is like baseball arbitration, where the player and the owner come in with their numbers and the arbitrator picks one.  "That is not how this works."  The arbitration panel also does not split the high and low number, calling it a day.  That is rare, and has never happened to Mr. Kramer.  The arbitration panel is like a judge and jury.  They usually end up closer to the side they feel is better supported and better reasoned.
 
 
Carefree's and Cave Creek's attorneys have been working cooperatively to schedule the deposition of witnesses before going on with arbitration dates.  "It will happen."  Carefree is also working cooperatively with Cave Creek to try to agree on a mediator to see if a settlement can be reached in order to resolve it, rather than going through an arbitration that would be costly for all sides.  Arbitration panels aren't cheap.  All agree in principle to do a mediation.  Carefree suggested some names which Cave Creek is considering.  It's just a case of agreeing on a mediator at this point.  If a resolution that is agreeable to everybody can't be reached, an arbitration is scheduled to begin on October 26th.  I has been agreed upon to cut it down from 6 days to 4 days.
 
 
Mayor Peterson asked Mr. Kramer to address the continuances that frequently occur, and how that process works.  Mr. Kramer explained that he didn't remember even one case that didn't have at least one continuance.  "This happens all the time."  Either side can ask for a continuance, and they can both agree, but it doesn't mean you get it.  Continuances in this case were ordered by the arbitration panel in every instance.  "That's the way it works."  Mr. Kramer didn't think continuances were a big deal.  He generally doesn't take note of them at all.

 
 
The original arbitration date was a couple of weeks ago.  They held 3 long scheduling conferences trying to figure out how to do this during the Covid pandemic.  An arbitration had never been held during times like these.  They talked about renting a hotel ballroom, having it sanitized, having wires run  for computers and monitors, and figuring out a way to stay socially distanced but still having confidential communications between the 2 teams.  All would stay at the same hotel, including the witnesses, for the 14 day quarantine period.  What would happen if someone got sick?  "It was nuts."  The panel made the decision with the hope that, by October, protocols would be in place and facilities would be available.
 
 
At one time or another, both sides asked for continuances, with each side opposing the other.  Ultimately, it was decided by the arbitration panel.  "So, really, don't make too much of it."
 
 
Councilman Gene Orrico asked if questions were allowed.  Mayor Peterson explained that they were not allowed at this meeting, but could be asked later, in executive session.  He thanked Chris Kramer for the update, and the meeting was adjourned.
Lyn Hitchon
 
 
Prepared by Carefree Truth
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