Getting serious about Cave Creek’s financial future

By Linda Bentley | June 3, 2009

‘Walmart is not the economic savior, just one of the components’
CAVE CREEK – Mayor Vincent Francia took some time last week to sit down and chat with Sonoran News about his thoughts on Walmart.

Vince FranciaFirst of all, Francia explains, the town did not court Walmart. Walmart picked the town, chose the location, purchased the land and is going through the process, as they have a legal right to do.

Out of all the letters the town has received opposing Walmart, it appears only one, or possibly two, are from Cave Creek citizens.

Some of the opposition letter writers, including part-time residents of Carefree who have their tax bills mailed to a Midwest or East Coast address, claim to live in Cave Creek. However, property records readily available on the Maricopa County Recorder’s website debunk their claims.

It was obvious some letter-writing campaigns were initiated through HOA e-mail lists when a barrage of letters stating the same objections, with the same misspellings, from the same Carefree subdivision, all arrived the same day.

Although he says he’s never been inside one, Francia said there appears to be some sort of a stigma attached to the Walmart name and asked, “What if it was called the Cave Creek General Store?” wondering if people’s perception would be different.

Francia points to Walmart’s success, even during this economic downturn, which he said Walmart Attorney Sean Lake attributes to selling people what they want at a good price.
If the town were not experiencing the economic realities of 2009, Francia said he would still support Walmart, for a number of reasons. One is the lesson learned through rejecting Home Depot, which originally wanted to build on the southeast corner of Cave Creek Road and Carefree Highway.

Another reason is the town’s growth from a population of 1,800 to one of approximately 5,000. The town can no longer meet the needs of the community with only the sales tax revenue generated by the town core, even if every square-foot of retail space in town were occupied.

And, Francia says Walmart has a legal right to do what it is doing, there is a process in place for what it is requesting and it is going through the proper procedures.

During the June 8 council meeting, Cave Creek Citizens for the Future will present its White Paper to council. The report was compiled by an informal committee, who agreed, at the mayor’s behest, to review the town’s current financial condition and make recommendations to rectify or ameliorate its short term needs as well as create a new economic model for the development and growth of the town.

The committee split off into three subcommittees so it could simultaneously research and evaluate expense reduction, revenue generation and financial management, while the committee brainstormed ideas for economic development.

The paper explains the costs per capita associated with being a low-density land use community are higher than other communities “without the same land use luxury.”
Including the annexation, the town is 38 square miles, or 24,320 acres. At its current population of 5,000, that equates to one person per five acres. If, at build-out, the population were to double, that would mean one person per 2.5 acres, which is still considered extremely low density.

Because of the limited number of residents, the costs for town services will always be more than other municipalities with higher densities.

The committee concluded the town was at a fiscal crossroads with limited choices: increase the sales tax base beyond the capacity of the town core and/or institute a property tax.
Francia reiterated his opposition to property tax, stating the government is then placing a lien on people’s homes.

The White Paper makes 29 specific recommendations, some of which have already been implemented by town hall to reduce expenses.

For revenue generation, suggestions included a prepayment program for water on a six-month or one year basis offering 8 percent and 12 percent reductions, respectively; selling excess equipment and vehicles; developing a written procedure for construction permit and sales tax compliance; and studying contracted trash services to reduce road use and maintenance costs.

Impossible to ignore, Walmart is noted as potentially being able to generate an additional $3 million in sales tax revenue per year for the town and, as the report states, “Most importantly, this site can be developed by June 2010.”