State Puts Annexation On Hold

Annexation on hold
The State Land Department informed the Town Of Oro Valley that it is suspending discussion of this annexation until some later point in time. 

Lack of staffing to handle process
The reason given is lack of State Land Department staffing.

"Unfortunately, due to several staff vacancies, including the project manager assigned to Oro Valley, the Department has elected to put this project on hold for the time being." Instead, they will focus on "...other priority work." (Letter to Town Of Oro Valley from State Land Department, July 31, 2019)

Will be revisited in the future
The project is not gone, however: "We still do intend to follow up on the project at some point in the future."

Contentious issue for many residents
The annexation of these state lands and the conversion of these lands to large tract housing has been a contentious issue in Oro Valley. Oro Valley is the only community that can do anything by annexing this land because it is the only community that can provide water to it. As we have reported, Marana does not want it.

Read more on this annexation here.

Guest View: Jim Tripp ~ The Rest of the Iceberg. Part 2: Do State Land Department Site Specific Plans Help or Hurt K-12 Education Funding?

Bankruptcy is achieved by habitually incurring expenses in excess of revenues. Despite having been granted 9.3 million acres of Federal land to sell and lease in order to fund K-12 education, the Arizona State Land Department (ASLD) still cannot generate enough revenue to cover costs. How severe is the gap?

• Local school districts were recently forced to sue the state for adequate funding

• From 1966 to 2006, AZ dropped from 130% of the national average to 80% in K-12 education expenditures (Chart 12, p. 33)

• AZ currently now ranks 48th in K-12 education funding and many quality metrics (pp. 5, 6, 43, 44, 50, 53 in the above link)

How did ASLD manage to fail so miserably in its purpose? By getting the green light from the courts to seek maximum selling price for K-12 Trust Lands, regardless of K-12 funding liabilities incurred during rezoning for highest price. This legal policy has enriched real estate developers, but impoverished school districts.

Case in Point: the Annexation at Tangerine and Thornydale
The Site Specific Plan for the Tangerine and Thornydale annexation (page 75) says that 1,767 K-12 students will be added to the Marana School District if Oro Valley should annex and develop the land using the recommended zoning. I wondered why the Marana Unified School District (MUSC) would accept such a burden and, after multiple discussions with different officials, I got the answer: MUSC will get its ~$8500/student/year from the State, or ~$15 million/year, regardless of the selling price of this tract of land.

Where will this ~$15 million/year come from? Well, if the ~3100 houses in the plan pay a similar school tax to me in Sky Ranch, each household will contribute ~$1400/yr in school taxes, for a total of ~$4.3 million. That means, for this annexation to make financial sense for K-12 education, the revenue stream from the sale of the land needs to be ~$10.7 million/year.

What selling price is required to generate annual interest revenue of $10.7 million/year? First, we need to know a safe interest rate, so let’s try 2-4%. At 4% interest, the sale price would need to be $267 million, or ~$302,000/acre, given that the annex is 885 acres in size. At 2%, those figures have to double to $534 million dollars or ~$604,000/acre. Is anyone going to pay ~$300,000 to $600,000/acre for that land?

In my opinion, this is why AZ K-12 education funding is in crisis. The crisis will only deepen, and beneficiaries of the Trust will be more and more harmed, if Site Specific Plans like this are applied to the millions of acres of State Trust Land.

Solution: Future Revenue Stream Must Cover Future Expenses
When ASLD demands aggressive rezoning from a Town in order to achieve the highest selling price for a tract of State Trust Land, ASLD should be required by affected towns and school districts to demonstrate, from its appraisals and data on K-12 education costs, that the predicted future revenue stream will equal the predicted future expense stream. The farce of ASLD simply trumpeting their record-breaking revenue additions through land sales without revealing that it was accomplished by taking on more student expenses than the expected revenue and school tax stream will support has got to stop.

Parting Shot: Don’t Forget Water Liabilities Either
The 860,000 gallons/day required by this plan (p. 75, Water, 2nd paragraph) is another piece of “the rest of the iceberg.” What is going to happen with regard to AZ water demand if this pilot project goes Statewide, with Towns and developers eagerly adopting its aggressive rezoning and entitlement techniques? With Arizona currently under a Drought Contingency Plan, this is, in my opinion, another reason for Oro Valley to reject this pilot plan out of concern for the whole State, and take it up only after the overallocation of the Colorado has been dealt with.

The little-known “pilot plan” aspect of this annexation should have been discussed with the public and their elected officials before trying to push it through a struggling Town approaching buildout.

View the Site Specific Plan HERE
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Jim Tripp has a Bachelor’s degree in Biological Sciences from Cornell University and a Ph.D. in Molecular and Cellular Biology from Oregon State University. Prior to retirement, he was employed as a Federal Regulations Analyst for Wisconsin Power and Light and as a Research Scientist at UC Santa Cruz and Berkeley National Labs. He has over 30 scientific publications to his credit.

Guest View: Jim Tripp ~ The tip of the iceberg: Annexation of 885 acres of State Trust Land at Tangerine and Thornydale is a pilot project for 9.3 million acres of trust land

Since last August, I have been researching the Arizona State Land Department (ASLD) proposal to put approximately 3100 houses (with their associated cars and people) on the proposed annexation of 885 acres of State Trust Land at Tangerine and Thornydale.

I read the plan and wondered: "Why isn't the CAP Water Board trying to block this development, which will require 860,000 gallons of water day? The Colorado River is already over-allocated, which has led to us being under a Drought Contingency Plan."

Two conflicts of interest uncovered
Oh. Lisa Atkins is the Board President of CAP (Central Arizona Project) as well as Commissioner for ASLD. That would explain it. Although her position at CAP is not a paid position, she does have a conflict of interest as Commissioner of ASLD and CAP Board President. Ironically, Atkins said at "sunset" meetings for the ASLD that any attempt to merge ASLD with another related State department would inevitably lead to conflict of interest because control over different but related natural resources inevitably leads to conflict of interest!

So who is her Deputy Commissioner, I wondered? It’s Wesley Mehl of Tucson. According to the Tucson Sentinel in an article from July 2015, "Mehl is the son of developer, David Mehl, who along with brother George built the La Paloma resort in the Catalina Foothills, and the Dove Mountain development in Marana." That would explain why we are continuing the residential housing boom during deepening drought.

Sacrificing water and ignoring conflicts of interest
But maybe it's all worth it if it improves funding for K-12 education. That's what they said at the public meetings. In fact, they justified the whole project on the basis of a constitutional mandate to sell Trust Land for the benefit of K-12 education.

So I checked that out. Arizona ranks 48th out of 50 in public education funding, and K-12 education is by far the biggest single expenditure in the State budget. The Trust Fund has billions in it, but it costs billions every single year to fund public education. Maybe we need to sacrifice water and look the other way at conflicts of interest if it will help K-12 education.

The math doesn’t add up
So I estimated that the Trust land might sell for something like $100 million, which would perhaps yield 3-4% ($3-4 million dollars per year) on the $100 million. But the plan adds 1,767 K-12 students, at a cost of about $15 million per year (to stay in 48th place), for a net loss of $11-12 million per year.

Why is the Marana School District (where the Oro Valley annexation is taking place) allowing this? Because they will get their $8500 per year per student from the General Fund, even if those students drain the General Fund at $11-12 million per year. State taxes will have to be raised or other services curtailed, to make up this deficit. What an irony, given that the whole point of Trust Land sales was to provide enough money so that K-12 education would never cost taxpayers a dime as Arizona moved from Territory to State!

Marana School District CFO never reviewed the site plan
I contacted Don Contorno, Chief Financial Officer of Marana Unified School District, who wrote a letter of approval to Oro Valley for taking on the students. He wanted to know where I got the outlandish number of 1,767 K-12 students, and I told him that it was from the published Site Specific Plan. He sheepishly confessed that he never read the plan and assumed the area would be developed like Sky Ranch.

A “Model” for future development
ASLD and Oro Valley have not publicized that this is a pilot project to be rolled out for the entire 9.3 million acres of trust land, with a stated goal of speeding development by transferring zoning rights from citizens to developers via "zoning banks."

LOVE readers and residents of Sky Ranch, Tangerine Crossing, and Dove Mountain need to present a united front now and in the future.

You can view a detailed slide presentation HERE

Please visit my Facebook page (MyLand.YourLand.AZ)   HERE
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Jim Tripp has a Bachelor’s degree in Biological Sciences from Cornell University and a Ph.D. in Molecular and Cellular Biology from Oregon State University. Prior to retirement, he was employed as a Federal Regulations Analyst for Wisconsin Power and Light and as a Research Scientist at UC Santa Cruz and Berkeley National Labs. He has over 30 scientific publications to his credit.