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: Robert Peters ~ Oro Valley is Nothing More Than a Profit Center for Developers

My wife and I recently attended an Oro Valley Neighborhood Meeting regarding the proposed annexation of a 321-acre parcel of State Trust Land on the NE corner of Tangerine and Thornydale.

Contrary to what your real estate agent may have told you when you agreed to pay a premium to live next to State Trust Land, this is not public land that will never be developed. It is land governed by the Arizona Constitution that can be sold at auction to the highest bidder for the economic benefit of “Trust Beneficiaries.” In this case, that beneficiary is the schools (K-12).

Oro Valley is proposing annexation of this land to prevent Marana or Pima County from doing the same. Their reasoning is that they would prefer to have control over how this land is eventually developed. For those of you who have been living here for many years, the notion of Oro Valley getting their hands on a large parcel of pristine desert is not a comforting thought.

Councilmember Solomon was more interested in his phone
The Neighborhood Meeting was packed. The following five councilmembers were in attendance: Mary Snider, Lou Waters, Bill Rodman, Rhonda Pina and Steve Solomon. It should be noted that Solomon spent most of the evening looking down while scrolling on his cell phone. This is not the first time we’ve observed him doing this during a Town meeting. This should give you some insight as to how much he cares about listening to his constituents.

Residents speak up
After the Town’s presentation, the Q&A session became quite heated. People were justifiably concerned about their property values, their privacy, and the impact to both flora and fauna. They were well-aware that recent land rezonings in our town have featured mass grading, tiny 7,000 square foot lots, and a mix of one and two story homes separated by the smallest setbacks allowable under building codes, leaving little room for indigenous desert plant species and wildlife.

Comments from the audience included the following [paraphrased]:

• They need to come up with a better plan to fund education other than destroying the desert.

• Why bother building wildlife tunnels when there will be no wildlife left to use them?

• First you sell the land to raise money for schools. Then developers build more homes on that land, thereby increasing the school population, which will then necessitate the selling off of more State Land to raise money for more schools. It’s a never-ending cycle of desert destruction.

• Since money is all this town cares about, we can all protest by not shopping in Oro Valley. Spend your money elsewhere.

• One woman began her speech by connecting the Town Council’s poor financial decision in purchasing the Community Center and Golf Courses as the reason why they don’t have any money for ball fields at Naranja Park which has led to a property tax proposal in order to fund them.  Regarding the annexation, she stated that you can expect them to mass grade this beautiful land in their never-ending quest for money. She ended her speech with, “We need to vote these [expletives] out of office!”

And that will give you some idea of the anger in that room that night.

Oro Valley Standards?
The Town’s Senior Planner, Roosevelt Arellano, explained why Oro Valley wants to annex this land:

“We want to assure a good design that’s compatible with Oro Valley standards; something that we’re used to in our community.”

And therein lies the problem, because for many years, what we have become “used to” with “Oro Valley standards” is wanton destruction of the desert with barren, bladed landscapes free of any living plant or animal with homes packed so closely together that you can look out your kitchen window and watch your neighbor’s television.

A Studied Observation
Having the retrospection of 14 years of experience attending these Neighborhood Meetings and working with town staff, land owners and developers, we have come to realize an all too familiar pattern. Going forward, this is what you can expect:

Step 1: The highest bidder
Unless someone who cares about preserving the land can come up with enough money to outbid them, the land will be sold to a wealthy land developer.

Step 2: Enter the usual suspects
Most or all of the following people/entities will be involved in the development of this parcel: The WLB Group, Greg Wexler, Mike Carlier, Meritage Homes.

Step 3: Neighborhood Meetings
Neighborhood Meetings will be held where the developer will attempt to convince the surrounding neighbors that their proposal is the best use for this land. (NOTE: Similar to how a car dealer does not give you his best price upfront, it has long been rumored that the initial development plan includes much more than what they actually want. This gives them room to negotiate when neighbors form a Citizens’ Group to protest the development).

Step 4: Divide and Conquer
The Town and the developer will then use a divide-and-conquer strategy to covey favor with certain members of the citizens’ group in order to lure them away from the larger and stronger group, thereby weakening the group. They may approach individuals to discuss plans and negotiate terms privately and/or elect Neighborhood Captains of their choosing to help win over support for the proposed development. They will usually single out the owners of the most expensive homes as well as those in the group that they believe will be the easiest to convince and manipulate.

Step 5: Full Speed Ahead
The developer will make a few concessions to the neighbors, most of which were never high on their priority list anyway. Then, despite any remaining protests, the developer (most likely the WLB Group) will convince the Town Council to rezone the land to the highest density possible, after which you can count on Meritage Homes to be “the chosen builder.” The land will be mass-graded to cram in their usual 5-6 homes per acre for a total of over 1,000 homes.

Conclusion
This, as always, will be an uphill battle as the Town’s number one job is to collect revenue and the higher the density, the more revenue they will collect from development impact fees. It will always be a war to protect our lush desert surroundings (or what’s left of it) when there is money to be made.

Robert Peters is an Army veteran who served in Germany and South Korea. He has a Bachelor’s degree in Russian and Eastern European Studies and a Master’s degree in Business Management. He relocated from New England to Arizona in 2003 and was employed by Raytheon Missile Systems for 12 years, retiring in 2016 after 50 years of working. He’s been active in dog rescue organizations for the past 20 years. He’s also an avid reader and history buff who has traveled extensively throughout the U.S., Europe and Russia. A former hippie, he attended the 1969 Woodstock Festival in Upstate New York.