Funding Both Sides

January 9th, 2022

At this point most Boulders Homeowners Association (BHOA) members realize our Board has been litigating to stop installation of an earth-covered water reservoir (or ‘industrial water facility,’ depending on your news source), and many realize this all arises from the condemnation by the Town of Carefree of the portion of our common area along Tom Darlington Road at the southern edge of the Carefree Town limits.

Many also know the chief driver of legal costs to this point has been the BHOA contention that it is unconstitutional for the Town of Carefree to condemn this property if the Carefree Water Company or its parent, the UCFD, will be the ultimate user and owner (filings suggest the BHOA concedes Carefree Water’s right to do so, however).  Of the BHOA filings we have tracked, we classify about 80% as exclusively about this issue, and it has also been a relevant consideration in all but one of the rest.  Similarly, a large majority of Town filings have been in response to BHOA arguments on this issue.

Though this argument has failed in every court decision until now, that is not the main point of this communication.

The Board has recently stated their spending on these cases in 2021 was anticipated to be about $140,000.  The Town of Carefree has not released a projection but based on information we have received from them we estimate the Town’s spending to be somewhat higher than that.

Currently there are active cases in the Superior Court of Judge Daniel Martin (“the condemnation case”) Judge Jay Adleman (“the Ryan case”) and Division One of the Arizona Court of Appeals (“the appellate case”).  Though the Board recently told residents they are not paying legal expenses for the Ryans, we would point out that the Ryans have apparently abandoned their case and the BHOA has begun litigating it instead.

These are all active cases and litigation in each is continuing in 2022.  So who pays the bills?

We think most Association members know we are ultimately responsible for all the Board’s spending on these cases.  However, a large majority of us can also expect to pay a portion of the bill on the Town’s behalf.  How this works:

  • The Town is funding the cases currently, presumably out of the Carefree general fund.
  • The cost of litigation, however, is considered a Carefree Water Consolidation project cost.
  • All project costs can (and likely will) be recovered by the Carefree Water Company from rate payers through increases in monthly water rates.

BHOA members who are also Carefree Water ratepayers can expect to pay for both sides of this litigation (100% of the BHOA expenses plus 10-15% of the Carefree Water costs).  Further, BHOA success in these actions likely would be very expensive for Carefree Water (certainly more than $1Million, perhaps much more).

Most BHOA members are therefore litigating both sides of this constitutional issue, and the only thing that will be more expensive than failure would be success.  Is this really what our residents have voted for?  We believe the Board should be asking itself this question.

Please do not hesitate to contact us on the Contact Section of this website or at

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