Payson can afford to take over operations of a proposed new park and community center without raising taxes — and without signing an agreement that would require voter approval, Payson Town Manager Troy Smith told the council at the latest meeting on the ambitious project.
Contract Town Attorney Justin Pierce agreed as the council listened at the Aug. 3 work study, which moved the project a big step closer to reality.
The assurances seemed to impress council members at the joint meeting, which included board members and staff from the three groups working to build a park off Granite Dells Road as well as a community center and swim center off Highway 260.
The meeting revealed a host of still unresolved details, but zeroed in on some of the major concerns that councilors have raised.
Both the park and the community center would be built with money from the MHA Foundation on land originally bought for a university site. The negotiations involve two spin-off nonprofit organizations — one created jointly by Payson and Star Valley (the Rim Country Educational Alliance — RCEA) and the other created by community members interested in enticing a university to the area.
The park would cost an estimated $3 million and would include playing fields, a playground, hiking trails, a small lake and an artificial stream — all on land owned by the Alliance and leased by the Rim Country Educational Foundation (RCEF). The MHA would fund construction and the Town of Payson would take over operations, according to the current proposal.
The meeting this week at the Payson Public Library involved RCEA and MHA board members and town council and staff. The public was invited, but not allowed to comment.
The discussion focused on what it will cost to build and then maintain the park, whether the town would have to raise taxes and whether an agreement would require voter approval, under the terms of several voter-approved initiatives.
The RCEF has been seeking town and public input on the plan for months. The original plan proposed a park with playing fields and a community center with a covered pool that catered to seniors, said RCEF president Jennifer Smith.
However, the town’s input prompted the RCEF to draw up a new plan that doubled the size of the community center to serve all ages. That required moving the site of the proposed community center, which expanded the footprint of the park.
The RCEF has said it will build the park and community center — but hopes the town will take over operations and maintenance. If the town decides not to partner, the RCEF will go ahead with the $3 million park, but probably seek other partners and a new design for the much more expensive community center and covered pool, said Troy Smith.
The big shift at this week’s meeting came when Troy Smith and Pierce agreed the town could afford to go forward with the modified plan without raising taxes — and without triggering Propositions 401 and 402, which require voter approval for projects and contracts costing more than $1 million annually or long-term leases.
Jennifer Smith’s presentation made it clear the MHA Foundation will fund the project. The RCEA owns the land and leases it to the RCEF, a limited liability corporation. That arrangement would continue after the park and community center are built.
Kenny Evans, president of the MHA Foundation, said the organization has enough money to build the entire project, but will seek partners to help defray construction costs.
The plan offers the town a great deal, said Troy Smith.
“If the town wanted to own these facilities, it would have to pay for both capital construction and the operating costs,” he said.
Moreover, any agreement would allow the town to walk away from the agreement to maintain the facilities — protecting the town from future problems, said Pierce.
Right now, the town does not have a spare $30 million lying around to pay for constructing a new park and community center, said Troy Smith.
“We would have to go to the voters for funding,” he said.
That’s something Mayor Tom Morrissey wants to avoid.
“The concern I am hearing is, will this wind up in a financial state that will cost the town money that will have to be addressed by the raising of taxes?” he asked.
Troy Smith explained given the town’s current revenues, “I believe ... the town would be able to operate within its means.”
Moreover, he said a maintenance agreement between the town and the RCEA would not bump up against the $1 million threshold determined by Propositions 401 and 402, which voters approved in 2018. Pierce has advised the council that he thinks the propositions violate the Arizona Constitution and state law. However, only the courts — not the council — can invalidate a voter-approved measure.
Transparent Payson, formed to enact the propositions, has threatened to sue the town if it violates those propositions, now written into the town code.
However, Troy Smith said he thinks the propositions do not come into play in this project.
“A vote would not be necessary or authorized given the construct of how this facility would be operated,” he said.
Council member Jolynn Schinstock pressed for a completion date, particularly on the community center and indoor pool. The question of a town pool has taken on particular intensity as the town shut down its Taylor Pool this year for safety reasons.
“How many summers without a pool?” she asked.
Jennifer Smith said RCEF plans to complete the park in 18 months.
However, the organization has no timetable to complete the pool and community center, given the state of the discussions with the town. If the town decides not to partner — RCEF would likely seek other partners and perhaps redesign the project accordingly. However, if the town and the RCEF strike a deal — construction could start on the community center before the park’s finished, said Jennifer Smith.
Council member Scott Nossek worried about town resources. “I have heard many say we have difficulty maintaining the parks we have now,” he said.
He wondered what additional revenue streams besides taxes would fund the maintenance of the park.
Troy explained the town, with its pay-as-you-go philosophy, has for years focused its resources on the C.C. Cragin project, to the detriment of its streets, parks, and other assets.
Payson spent years building the $50 million C.C. Cragin project, relying on a combination of water impact fees on new development, an increase in town water rates and a low-cost state infrastructure loan — much of which was forgivable. The 2008 recession also depressed town revenues for years, prompting the town to halt even routine road maintenance for nearly seven years.
Things are different now that C.C. Cragin is complete, roughly doubling the town’s long-term water supply in the face of an epic drought. The town is now free to take a “proactive” role in assessing the needs and finding funding sources to meet those needs, said the town manager. Even so — the town could probably not afford to build the Granite Dells Park Complex on its own — much less the community center, said Troy Smith.
“If the town wanted to own these facilities … in order to fund construction, we do not have the financial abilities,” he said.
The town would have to find another partner or voter approval of a bond issue.
By contrast, with the proposed deal, “we’re only talking about the operating costs, ongoing operations and maintenance,” he said.
It’s still a long road to determine the full costs, however. Troy Smith has assembled a working group to get into the details, such as what type of turf will be on the playing fields, the programs and services offered and resulting staff needs.
“Our challenge is to make sense of this long term,” said Evans.