Payson Town Council Regular Meeting - October 23, 2024

The Payson Town Council held its regular meeting on October 23, 2024, at 4:04 p.m. in the Town Hall Council Chambers, 303 North Beeline Highway, Payson, Arizona. Mayor Chris Higgins presided. Present were Vice Mayor Barbara Underwood and Council Members Brett Flaherty, Joel Mona, Scott Nossek, and Susan 'Suzy' Tubbs; Council Member Jolynn Schinstock was absent. The amended agenda included two items moved to the consent agenda (2025 council schedule and janitorial contract) and Resolution 3423, added on October 22, 2024. The meeting recessed at approximately 6:19 p.m., reconvened at approximately 6:33 p.m., and adjourned at approximately 7:51 p.m. The minutes identify the invocation by Pastor Joe Tuccinardi of U-Turn for Christ, while the raw transcript names Pastor Logan Hogue.

Public Comments & Testimony

• Becky Orohood, identified as president of PACEN, thanked the council for pursuing projects funded by the increased sales tax and urged the council not to repeal the bond sales and to stick to its plans. She said better amenities were needed to attract and retain medical workers and make Payson safer for older residents.
• Charlie Bell said he was surprised to be treated as an influential opponent and blamed for stopping bond sales. He believed the council heard residents but did not listen, and that recent election results reflected that.
• Tom Dunning, a 20-year resident, said all agenda items were important, praised the professionalism of staff and council, and called the fire truck decision potentially life-saving.
• Stephen Otto, identified as mayor-elect but still a private citizen, objected to being blamed for repealing Resolution 3409. He said his objection to the bond was that it appeared incomplete, that he had not seen fee or total cost details, and that the listed projects appeared to exceed available funding.
• Jim Ferris asked that several consent agenda items, such as procurement and finance policies, be pulled for discussion. He argued against buying a new ladder truck, saying an affordable used unit could be found, and cautioned about cooperative improvements in the Green Valley lease agreement, including developer control of contracts and invoicing. He also said the election outcome should have signaled public opposition to the bond.
• Lori Thompson spoke during the aquatics discussion, saying swim lessons save lives and that Payson needs a pool but not an Olympic pool. She said a six-lane pool would not allow regional, state, or Special Olympics competitions; Cottonwood has eight lanes; the school district had not been consulted; and programming and cost recovery needed to be established before design. She acknowledged the current channel and slides were attractive but said they would not draw visitors.

Consent Calendar

• The council approved all nine consent agenda items in one motion, 6-0, with Council Member Schinstock absent.
• Approved minutes of the October 9, 2024 regular meeting and work session and the October 16, 2024 special meeting.
• Approved Resolution 3415 updating JPMorgan Chase bank signatories; Resolution 3416 appointing Donald Garvin as Town Magistrate and authorizing a professional services agreement; Resolution 3417 amending Financial Policy 504 (Procurement); Resolution 3418 amending Financial Policy 101 (General Financial Policy); Resolution 3419 approving Amendment 1 to the Houston Mesa Fire District IGA for fire and EMS; and Resolution 3422 authorizing the Town's FTA Drug and Alcohol Policy.
• Approved the 2025 Council meeting schedule, subject to change.
• Approved a Janitorial Services Contract with Dust Wranglers, LLC, for up to $465,000 over a three-year term, with two possible one-year extensions, subject to annual appropriation.

Presentations, Proclamations, and Reports

• Town Manager Troy Smith reported on departmental news and recognized the Digital Payson Working Group, a volunteer town manager committee created in 2020. Isaac Blake, chair, said the group united diverse stakeholders, improved public safety communications, expanded competition and choice, and achieved fiber internet up to six gigabit service, a resilient fiber backbone, new cellular towers, and state recognition. The council presented thank-you letters and gifts.
• Council Member Flaherty read a proclamation declaring October 29, 2024 as Payson Internet Day, accepted by Isaac Blake and the working group.
• Mayor Higgins read a proclamation declaring November 1, 2024 as Extra Mile Day. Marsha Dashney, Humane Society of Central Arizona director, and volunteer Teresa Purdy accepted; Dashney praised Purdy for seven years of dog walking, fostering, mentoring, and other volunteer work.
• Council Member Nossek read a proclamation declaring November 2024 as Veterans Recognition and American Patriotism Awareness Month. Joe Pickens of the Payson Choral Society accepted, noted the ceremony's history since 1990, and invited the community to the November 11, 9:30 a.m. ceremony at Payson High School Auditorium and the 11 a.m. VFW event at Green Valley Park.
• Library Director Emily Linkey presented a Certificate of Appreciation to Library Friends of Payson, noting the town paid for staff time while the Friends funded books and media (about $30,000 per year, or $2,500 per month), three children's computers ($11,256), landscaping ($10,700 in 2004), bathroom refurbishment, and a future audio/visual upgrade to the Mogollon multipurpose room (estimated $53,644). She encouraged memberships at $15 for individuals.
• Community Development Director Doni Wilbanks presented the annual General Plan status report. The 2014-2024 plan's implementation matrix was reviewed, and the new 2024-2034 General Plan had been approved by the council and would go to voters in November for ratification. No minor or major plan amendments were submitted this year.

Discussion Items

• Aquatic and Recreation Center schematic design: Project Manager Rod Buchanan and John Courtney of LPA presented the 30% schematic design for the proposed Payson Aquatic and Recreation Center on Malibu Drive. They described a 49,967-square-foot facility with a six-lane, 25-yard pool, zero-depth entry, current channel, outdoor slides, two indoor multi-sport courts, a multipurpose room, walking trail, and outdoor exercise area. The pre-design cost estimate of $44-49 million was reduced to $42-45 million by cutting about 5,000 square feet; using a pre-fabricated aluminum-and-glass natatorium reduced the estimate to $39.6 million (rounded to $40 million), about $2 million less than conventional construction. Solar panels and thermal solar were estimated to cut pool propane use by 55-65% and electricity by about 30%, with a six-to-seven-year payback (about five years with IRA rebates). The slides cost about $1.18 million; the current channel added about $950,000, roughly equal to adding two lanes. Buchanan said the pool could be expanded to eight lanes at additional cost. Council members voiced general support: Council Member Mona said Payson deserved better than the old Taylor Pool and recommended sound reduction in the lobby; Vice Mayor Underwood emphasized year-round multipurpose room revenue; Council Member Flaherty said even a $10 million Taylor Pool rehab would only be usable a quarter of the year; Mayor Higgins noted two extra lanes might support swim meets and cost recovery. Council Member Tubbs asked about mechanical roof costs, and staff said the cost was included in the $600-per-square-foot natatorium estimate, with a five-year warranty and low reported maintenance. No action was requested.
• Resolution 3420 - Ground lease with Payson Regional Housing Development for Green Valley Apartments II: Community Development Director Doni Wilbanks explained the amended and restated ground lease for a Low-Income Housing Tax Credit (LIHTC) project awarded by Arizona Department of Housing on June 3, 2024. Changes included lease term from 30 years plus three 10-year extensions (60 years total) to 75 years; lease payment of $2,000 per year plus a 3% annual escalator; parcel size reduced from about 2.75 acres to 2.33 acres; and IRS Section 42 language required by the tax credit investor. Public commenter Debbie questioned the 3% annual increase for 15 years with no later increase. Green Valley representative Shawne Mastronardi said the 3% escalator was required by ADOH and that rents would be income/rent-restricted for 55 years, with HUD typically allowing 1-2% increases; the goal was affordability for households at 30-60% of area median income. Town Attorney Jon Paladini said the changes were relatively minor, the lease had a buyout provision, and the town would recover roughly $200,000 on its land investment if the option was exercised. The motion carried 6-0.
• Resolution 3421 - Development agreement with Green Valley II of Payson, LLC: Town Engineer Larry Halberstadt presented a cooperative road and utility improvement agreement tied to the Green Valley II project and the future American Gulch Channel. The project would extend Wilson Court from McLean Road to the east, terminate in a cul-de-sac, and provide access and utility connections to town-owned property. The developer would build the improvements, and the town would reimburse no more than 50% of the estimated total cost of about $2.3 million, with most town spending in FY 2025-26. Council Member Tubbs asked whether such cost-sharing had been done before and raised favoritism concerns; staff said the town-owned property would benefit and that such arrangements are common for upsized utilities. Attorney Paladini noted the agreement requires competitive bidding, document sharing, and town acceptance of the total price. The motion carried 6-0.
• Resolution 3423 - Repeal of Resolution 3409: Town Manager Troy Smith reviewed the failed excise tax bond program. Resolution 3409 had been passed on August 21, 2024 with an emergency clause to fund capital improvements. A lawsuit by Deborah Rose and the Goldwater Institute challenged the emergency clause; the trial court ruled for the town on October 2, 2024, finding the suit moot and deferring to the council, but the Goldwater Institute appealed on October 9, 2024. Smith also described an appeal by Transparent Payson and a resident named Jeffrey All related to the repeal of Propositions 401 and 402, with the town prevailing at trial. He said the town could not sell bonds because required disclosures included risk from publicly stated opposition by the mayor-elect and council members-elect, including an August 18, 2024 email from Stephen Otto threatening to ask for state and SEC investigations. Smith said the town would not be able to sell the bonds and recommended repealing Resolution 3409. Council Member Nossek expressed disappointment but said he understood risk tolerance and trusted bond experts. Vice Mayor Underwood apologized to staff for their time and effort. Council Member Tubbs expressed heartbreak and invited the incoming council to work on solutions. The motion carried 6-0.
• Easement abandonment at 410 N. Maranatha Street: Larry Halberstadt presented a request by Craig and Mary McMullen to abandon part of a 60-foot-wide 1975 easement for public road and utilities. The unimproved road is used by neighbors, pedestrians, and the water department for well access. The applicants agreed to maintain ingress/egress and provide the water department with adequate well access. Craig McMullen clarified the proposed access area was southwest, not southeast, and noted the road meanders within the 60-foot width, making the boundary difficult to define. Staff said a topographic survey and staff collaboration would be needed to define the exact area. The council approved the abandonment request 6-0.
• Fire truck order: Fire Chief David Staub asked the council to authorize the Town Manager to order one fire engine and one ladder truck. The engine, a replacement, was partially funded with $460,000 added to the Capital Replacement Fund, with another $460,000 anticipated over the next two years. The ladder truck was a new addition; no funds had been allocated for it or its estimated $500,000 of equipment. Chief Staub cited the industry standard of needing a ladder truck if a community has five buildings three stories or more or requiring fire flow over 3,500 gpm; Payson had 22 such buildings, plus two approved hotels. He said the current mutual-aid ladder from Hell's Gate was near retirement and could no longer respond with lights and siren. The selection committee recommended Fire Truck Solutions/E-One for the engine at $1,181,754 plus up to $150,000 for equipment/industry changes, and Hughes Fire Equipment/Pierce for the ladder truck at $2,207,452.33 plus about $500,000 in equipment and $100,000 in potential changes. Delivery was estimated at 24-26 months for the engine and 46 months for the ladder; ordering would lock in prices before a November 1 increase. Council Member Mona said he had initially been skeptical but had confirmed the ladder truck's utility with other fire chiefs. Chief Staub explained its uses: large toolbox, elevated rescue, safe roof access, elevated master stream, and ember control, and said it would be staffed at current staffing levels. The motion carried 6-0.

Key Outcomes

• The consent calendar was approved 6-0.
• Resolution 3420 (Ground Lease Amendment) was approved 6-0.
• Resolution 3421 (Green Valley II Development Agreement) was approved 6-0.
• Resolution 3423 (Repealing Resolution 3409) was approved 6-0.
• The Maranatha Street easement abandonment was approved 6-0.
• Authorization to order two fire trucks was approved 6-0.
• The council received reports and issued proclamations; no action was required for the General Plan update or the Aquatic and Recreation Center schematic design.
• All recorded votes were 6-0 in the minutes; an apparent '621' in the raw transcript for the consent vote is a transcription artifact, as the minutes record 6-0.