Questions 3 and 4
Carefree Town Council
On June 2nd Carefree Unity submitted questions to all Carefree Town Council candidates running in the August 2nd election. Yesterday we posted responses to the first two of the eight questions and today we are posting candidates’ responses to questions three and four. All received responses are currently available at https://carefreeunity.com/carefree-candidates/.
3. How do you believe the Town’s reserve funds should be utilized? Is the Town’s fiscal balance sheet sound?
Glen Grossman:
The balance sheet is sound, and we are fortunate to have a reserve fund. These funds (over $14 million) should be used sparingly for essential, large capital projects that are voted on by the people of Carefree.
I have been outspoken about retaining Rural Metro Fire Department due to their 50 years of excellent fire and emergency service at a relatively low operating cost. However, many have said that we should adopt automatic aid, which would require a new, more expensive fire and emergency service. It would also require over $500,000 of up-front equipment. I believe the voters should decide on their fire service and if they do pick an automatic aid service, the up-front cost should come from the reserve funds. The additional operating costs will have to come from a re-working of the current town budget, since the only fire service provider which fits in the current budget is Rural Metro.
Stephen Hatcher:
The reserve fund is an account that is funded each year to finance future capital projects. For example, every four years we repave miles of the town’s streets. This is very expensive and as a small town we need to save the funds to properly maintain this critical infrastructure. A town manager very much like a CFO has the obligation to ensure funds are available to meet current and future capital needs. Our town manager has always demonstrated fiscal prudence and forethought and as a result the town is in excellent financial condition. This demonstrates good government.
Cheryl Kroyer:
Reserves should not be used to support reoccurring expenses such as ongoing operational expenses. Reoccurring expenses should be matched with reoccurring revenues.
The reserves have been funded through savings of any annual surplus from operational revenues and one-time revenues from new construction. Over time, these contributions to reserves will diminish as inflation impacts our annual operational costs and the community reaches build out and no longer receives revenue from new construction. Therefore, we need to use reserves wisely, for the purpose they were allocated to fund street repairs and capital improvements. To do differently would violate our best municipal practices and leave us with larger costs to repair our aging infrastructure.
Mike Johnson:
Carefree is one of the most financially sound towns in Arizona. Its balance sheet is strong and has survived economic down-turns including the 2008 great recession and Covid-19 pandemic. The reserve fund is set aside to pay for one-time capital projects such as road maintenance and new machinery such fire trucks and equipment. The fund has been has been created from savings over many years so that these projects can be paid for as they arise. Deferring capital projects can cause the actual costs to go up dramatically which can make them too expensive in the future.
The Town’s reserves should not be used for re-occurring or operational expenses such as public safety. Those expenses should be funded by reliable, re-occurring revenues to prevent financial peril when the Town’s reserves are depleted.
Vince D’Aliesio:
We are a very fiscally conservative council and town. We have the highest cash reserves in the history of our town and have made sound financial decisions, even through a pandemic. Our reserve funds should be kept for projects such as street repair.
Sheila Amoroso:
The Capital Reserve fund is designed to provide the resources necessary to maintain our future infrastructure needs. It is common for a small town to save money in a capital reserve fund for future projects. A larger town can easily finance these needs in the capital markets.
The town has a 5-year capital project improvement plan and 10-year street preventative maintenance plan and culvert maintenance plan. These are updated annually.
The capital reserve fund also includes the rainy-day fund which helps to sustain town services during economic down turns.
The town manager keeps an eye toward the future and understands that sustainable revenues and control of expenses is vital to maintain budget balance. The Town has a history of being fiscally responsible as demonstrated in our annual independent audits.
Tony Geiger:
The Town’s fiscal balance sheet is strong and has weathered several economic shocks including the great recession and Covid.
The Town’s reserve fund should be used for the funding of one-time capital projects such as road maintenance and potentially new capital equipment such as new and additional fire equipment. The fund has been saved up over several years so that these types of projects can be funded on a pay as you go basis. If capital projects are deferred for too long, the costs can go up exponentially, making them unaffordable. This approach has made Carefree one of the most financially strong towns in the state of Arizona.
I do not believe the reserves should be used for reoccurring, operational expenses such as public safety. Best practices in municipal financial management call for such expenses to be funded by stable, reoccurring revenues. To do otherwise puts the Town’s finances in a precarious position when the reserves are drained. Then how will the town pay its bills?
4. Do you support the Carefree Water Consolidation Project? Do you support the implementation actions taken by the Town to this point?
Stephen Hatcher:
I strongly support this initiative for two reasons. First, we received numerous complaints from citizens regarding the poor quality of water being delivered to their home from the Cave Creek water system. This was our CAP water being processed and delivered through the Cave Creek piping system. Secondly, we lost a significant economic development project, Sprout’s Grocery store, because we were dependent upon the Cave Creek’s piping system to deliver the required water to the NE section of Carefree Hwy and Cave Creek Rd. Cave Creek refused us usage of their piping system in order to successfully pull this project into their town. Not only did we lose the $400K in projected tax revenue but also the hundreds of thousands of dollars in revenue that would have been realized from the various supporting businesses. This one project most likely would have totally financed our future fire department needs for the town. Never again will we be dependent on our neighbors in controlling our economic growth.
Eminent Domain is at times an essential means for the overall prosperity, safety, and growth of a community.
Cheryl Kroyer:
Absolutely. Everyone in our community needs and deserves access to a reliable, quality water supply. One third of Carefree residents asked for representation in their water resources. In the past two election cycles, those candidates who stated this was a critical community issue and supported the project got elected. Promises made were promises kept. This is good and responsive government. The plans to accomplish this water transition will help our entire water system plus it provides a financially solvent plan with negligible impact on existing water rates and will provide a more resilient water system for ALL of Carefree.
Mike Johnson:
I support the project. The project was publicly vetted over 4 years and two different elections. Some of the key details of the project include:
- The 550 new accounts coming into the system will substantially fund the project by paying higher water rates than existing customers and will generate enough additional revenue of approximately $1.1 to $1.2 plus million per year to service the $1.1 million of principal and interest payments required annually. Existing customers will only see the same 4.4% rate increase they have experienced in past years.
- The new customers bring with them 378-acre feet of CAP water but only use approximately 225-acre feet per year. The extra 153-acre feet of water will benefit all residents of Carefree.
- The 300,000 gallon buried water reservoir being constructed will benefit all residents of Carefree by providing additional fire capacity and emergency storage with in the entire system, making it more robust.
- Part of the project includes upgrades to the existing system bringing fire protection to parts of the system that have not had it in the past.
I support the implementation actions taken by the Town as the standard used was the greatest public good with the least private harm.
Vince D’Aliesio:
Through the numerous public meetings with our town engineer and staff, the actions taken by the water company board (on which I serve) serves the best interests for all of our residents/business owners. Not only will we bring all Carefree residents onto the same water service, but the additional accounts will also increase revenue by $1.1 million annually, with the Central Arizona Project Water Allocation to these accounts moving with the accounts to Carefree. Current customers on Carefree water will also have upgrades to piping and infrastructure.
Sheila Amoroso:
I fully support the Carefree Water project. Not all water systems are created equal. While customers of Carefree water were receiving high quality service, customers of Cave Creek water were not.
After many complaints from Carefree residents regarding service of their Cave Creek water, Carefree began to evaluate solutions and hired outside engineering professionals to help. Integration of all residents into one system was determined to be the best solution, this included the underground water tank.
Common complaints regarding Cave Creek water are bad smell, bad taste, clogging and inconsistent water service. Also, there were concerns regarding poorly maintained fire hydrants.
Carefree residents subscribed to Cave Creek water have no representation or power in the town of Cave Creek.
Water is a precious resource which needs sophisticated management. With increasing population/usage and drought across the West, we need a capable and successful management team to protect and grow our water resources. Carefree water provides that expertise.
All Carefree residents deserve high quality water service and the NEW Carefree water customers are paying for the new Carefree Water debt.
Tony Geiger:
I support the project. The project was publicly vetted over 4 years and two different elections. Some of the key details of the project include:
- The 550 new accounts coming into the system will substantially fund the project by paying higher water rates than existing customers and will generate enough additional revenue per year ($1.1 – $1.2 million/yr) to service the $1.1 million of principal and interest payments per year. Existing customers will only see the same 4.4% rate increase they have seen in past years.
- The new customers bring with them 378-acre feet of CAP water but only use approximately 225-acre feet per year. The extra 153-acre feet of water will benefit all residents of Carefree.
- The 300,000 gallon buried water reservoir being constructed will benefit all residents of Carefree by providing additional fire capacity and emergency storage with in the entire system, making it more robust.
- Part of the project includes upgrades to the existing system bringing fire protection to parts of the system that have not had it in the past.
I support the implementation actions taken by the Town as the standard used was the greatest public good with the least private harm.
Glen Grossman:
We are encumbering all Carefree homeowners with over $18 million of debt to provide water service to 526 houses that already have water service. This doesn’t seem to make sense to me.
Carefree Unity 