By Matthew Holloway |
The Payson Town Council’s August decision to incur a $70 million debt via a bond measure approved without a public referendum has triggered a lawsuit from concerned residents with the assistance of the Goldwater Institute. Goldwater is assisting resident Deborah Rose to challenge the measure despite the Town’s claimed legal pretext of an “emergency” to counter efforts from the public to stop it.
John Thorpe, a Goldwater attorney representing Deborah explained, “Our leaders want our money, but not our vote. They’re trying to take advantage of legal loopholes to saddle their own constituents with tens of millions of dollars of debt, systematically stripping power from the people by ignoring laws and twisting their truths.”
As noted by the Payson Roundup, the lawsuit seeks to block the bond resolution by arguing that no legal emergency actually exists. However, the outlet reported Payson Town Attorney Jon Paladini scoffed at the lawsuit as “specious,” and claimed it would be dismissed quickly. He told the outlet, “Bottom line is that the courts are prohibited from second guessing a legislative body like the council — a slew of cases tell us that. It’s about as close to being frivolous as we’ve seen.”
The use of the city’s emergency clause with a 6-1 vote forced the bond sale into immediate effect and brushed aside the typical 30-day period voters would have to gather signatures to force a vote.
The alleged justification for the “emergency” comes from speculation that at an upcoming meeting of the Federal Reserve, the Fed is expected to reduce interest rates by a quarter or half-point which would lower the interest rates the town would pay.
Thorpe argued that, “Government officials’ efforts to time the market, based on pure speculation about financial trends, is not an ‘emergency,’” and added that this use of the “emergency clause” violates the Arizona constitutional right to organize a referendum and vote on it.
“The so-called ‘emergency’ here is nothing more than town officials’ apparent belief that interest rates might rise in coming months, and that they’ll secure slightly better municipal bond terms now than they could in 30 days if they gave residents the opportunity to organize a referendum,”
He wrote, “When the council approved the bond measure, it slipped in an ’emergency clause,’ stating that the measure would go into effect immediately, without letting residents who might oppose the measure organize a referendum and put the issue to a vote. But the Arizona Constitution guarantees the right of referendum: the right of Arizonans to circulate petitions and refer bills, ordinances, and resolutions for a popular vote. It’s a cornerstone of democratic accountability in Arizona, and it means that the people—not politicians—have the last word in state and local government.
The Payson Town Council is trying to bypass that safeguard and short-circuit the democratic process using a legal loophole: a narrow exception allowing cities and towns to enact emergency measures without waiting for a referendum when such measures are ‘necessary for the immediate preservation of the peace, health or safety of the city or town.’ The so-called ’emergency’ here is nothing more than town officials’ apparent belief that interest rates might rise in coming months, and that they’ll secure slightly better municipal bond terms now than they could in 30 days if they gave residents the opportunity to organize a referendum.”
Paladini maintains that the bond sale measure meets the emergency clause designation and therefore the bonds for such general town projects as “a community and swim center, hiking trails and trailheads, covered event center to lure conventions,” and “upgrades to Main Street to create a business and entertainment district,” “improvements to streets and to public facilities like the police station and fire stations,” according to the Roundup, all constitute “emergency” spending. As noted in the Roundup, nearly all bond sales rely upon the “emergency clause” to sidestep the possibility of blocking them through referendum.
Should the Goldwater lawsuit succeed, it would enforce the standard that voters can in fact challenge bond measures as intended under the Arizona Constitution.
Matthew Holloway is a reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
