Can We Really Afford to Give Up 11 Million Gallons of Water Each Year? (Part 1)

Our City Council unanimously approved an ordinance authorizing the transfer of 35 acre feet of potable water every year (that equates to 11,404,785 gallons) to the American Water Corp. in support of the Refuge Annexation Plan. [See Footnote 1.]

The story from the Aldridges is that their #1 reason to annex this land is because of water.  In fact, they have actually stated that to them “it’s all about the water.” Well, what they are not telling you is that the only reason water is an issue at all is because of their plan to convert this land from an Arnold Palmer Signature Golf Course to an RV Park. 

Water is NOT an issue if the The Refuge remains as the golf course community that was originally designed and developed. The original water allocations continue to be sufficient for the golf course (as a golf course) and the surrounding community of homes.

You may read that these 11 million gallons of water will not cost the taxpayers anything.  What about the cost of giving up those 11 million gallons of water, 11 million gallons EVERY YEAR that could have otherwise been used by the residents of Lake Havasu?

Right now, while water scarcity and conservation are primary concerns on the part of this entire region, it’s pretty hard to imagine that this redistribution of such a precious resource to an RV park is in the best interest of LHC residents. 

Based upon a City Council Staff presentation, Lake Mead levels have declined over 130 feet in the last 11 years and 2010 was one of the larger years for that lake decline. The current lake level is at 1082 elevation and the Bureau of Reclamation’s first trigger point to declare a shortage is elevation 1075.  Never before has a shortage been declared but there is a 30% chance by 2014 that this will be the situation. [See Footnote 2.] Lake Havasu City is and will be one of the first affected since the city is a priority 4 customer and priorities 1 through 3 will be serviced first.

While future water shortages are probable, the LHC residents have been conserving water for years.  The sewer project has resulted in conservation by the way the sewer fees are calculated.  This calculation method has forced homes and businesses that are connected to conserve water in an effort to minimize their sewer bill.  And with that successful conservation effort are increased water rates due to the reduction in the amount of water delivered to customers and the operational costs remaining the same.

With the pending shortages and our already high water rates why would the City resort to delivering 11 million gallons/year of our water allocation to an RV Park and jeopardize our future use and future city build out plan? The City may say it is
“only 35 acre feet of water”, but that translates into eleven million four hundred four thousand seven hundred eighty-five (11,404,785) gallons of water each and every year.

 If this water transfer is such a good idea and increased revenue is the driving force that is causing the City to make this decision, then why wouldn’t the City just sell these water rights directly to The Refuge without the legal entanglements of annexation?  Annexation does not have to occur in order to transfer these water rights. 

And consider this important factor:  Water delivered within the City limits commands one rate.  Water delivered outside City limits fetches a higher rate and translates into even GREATER revenues for the City (this will be explored further in Part 2).

Finally, what guarantee do the residents of Lake Havasu have that this transfer of water rights would not be increased if 11 Million gallons is not enough?  Can we really afford to turn over our very precious resource of water to support another RV Park for the City?

Footnotes:

[1] Regular City Council Meeting, 10/26/10

[2] City Council Work Session, 12/14/10

Frivolous Lawsuits? Part 1 of a 5-Part Series

Part 1:  Refuge Promises To U.S. Department of The Interior’s Fish and Wildlife Service

The United States Department of the Interior’s Fish and Wildlife Service was opposed initially to the development of the Refuge Subdivision back in 2001.  They were concerned because the development would increase the population of residents adjacent to the Wildlife Refuge and would place increased burdens on the Wildlife Refuge's water and wildlife.

Fish and Wildlife advised the County of its opinion and requested that the Original Developer’s application for the Subdivision be denied.  In light of Fish and Wildlife's position, the County required the Original Developer to obtain the approval of Fish and Wildlife before the County would approve the development of the Subdivision.

In order to address the concerns raised by Fish and Wildlife and in order to obtain the County's approval of the development of The Refuge, the Original Developer agreed to:

a)   Lower the density at The Refuge from 600 units to 360 units;

b)   Eliminate all multi-family and time-share components of the development;

c)    Move the Golf Course clubhouse to increase the natural areas of the  Subdivision;

d)   Increase the acreage of the Golf Course to provide more open area and green space.

The Original Developer also promised and represented to Fish and Wildlife that the Golf Course would serve as an appropriate transition between the Subdivision and the Wildlife Refuge because the Golf Course provides natural open space, would protect the water and wildlife resources of the Wildlife Refuge, and the Golf Course would otherwise improve riparian conditions for the area.

The Original Developer made such promises to Fish and Wildlife to induce it to approve the Subdivision.

Fish and Wildlife approved the plans for the development of the Subdivision based on the Original Developers' representations and promises.  The Golf Course, in its platted state, was a key element in obtaining approval from Fish and Wildlife for the Subdivision.

Only after Fish and Wildlife issued its approval did Mohave County approve development of The Refuge Subdivision.

As the successor-in-interest to the Original Developer, The Aldridges are subject to the representations and agreements of the Original Developer with Fish and Wildlife.  These agreements run “with the land”.  To replace 50 acres of this land that was agreed to remain as a “buffer” between the homes and the Wildlife Refuge with 300 RV pads and all of the associated by-products and significantly increase the density of the area would be a direct violation of these representations and agreements.  

Besides the legal ramifications, if these agreements and restrictions are disregarded by the Aldridges and the City of Lake Havasu, how likely is it that these governmental entities will cooperate with developments such as this in the future?

Over the next several months, we will be providing additional information in this 5-part series.  Part 2 will address Final County Resolutions, the Final Plat Map, restrictions on further subdividing this land and zoning (which, by the way, is the basis of the lawsuit that was just filed against the City of Lake Havasu by Refuge property owners).

It is important for the residents of Lake Havasu to realize that by annexing this land, the City is stepping right into the middle of this legal and moral nightmare. Wouldn’t it make more sense for the City to wait until these and other issues of contention (outlined in separate postings) are resolved before moving ahead with this ill-advised partial annexation?  

For key documents related to this article, check our "Documents & Links" tab.

Who Can You Trust? Could This Happen In Your Backyard?

WITH ANNEXATION, LAKE HAVASU CITY STANDS TO LOSE:

- Future Developers and Future Master-Planned Communities
- Future Home Builders and Property Investors

When a master-planned community is initially established, commitments and promises are made; agreements between developers, cities, state and/or federal entities and prospective home-land buyers are created.

This was the case when The Refuge community was developed in 2002.  Because of its unique location abutting the National Wildlife Refuge, even more stringent requirements were established (to be outlined in a future posting). 

Home builders and lot investors in The Refuge trusted that these agreements would “run with the land”, particularly with the very specific commitments outlined on the final plat map and original patent on this land.

In America, a “trust deed” is what you receive when you purchase land.  This “deed” holds within it the “trust” we all depend on as we move forward into otherwise uncertain futures.  For the home-land purchasers in The Refuge, these trust deeds included written assurances that now affect the very land attempting to be annexed and converted to an RV park. But those original assurances guaranteed that this particular land would remain an “open space” championship golf course and as such would remain an “enduring feature” of the community.  This was part of original commitment made by governmental authorities and Refuge home builders and investors relied on those “commitments.”

But what happens when an opportunistic and predatory investor comes along and changes a master-planned community by ignoring those original commitments?

In America, land use laws protect property owners from this type of shell game.  Investors and home builders must have assurances that their properties will remain intact…without that, future building suffers. If such builders sense that the rug could be pulled out from under them at any moment with governmental commitments simply set aside…who in their right mind would invest in such a place?

If Lake Havasu City officials agree to this partial annexation thus allowing the Aldridges to disregard these original commitments and replace an Arnold Palmer Signature Golf Course with an RV park, what happens to future developer’s or investor/home builder’s trust? What happens to our future? 

COULD THIS HAPPEN IN YOUR BACKYARD?

LHC Unified School District Funds In Jeopardy

WITH ANNEXATION, LAKE HAVASU CITY STANDS TO LOSE:

-AT LEAST $100,000 AND UP TO $500,000 IN BADLY NEEDED SCHOOL FUNDING

-HUNDREDS OF CONSTRUCTION AND LANDSCAPING JOBS

-MILLIONS IN RETAIL SALES TO HIGH-END HOMES THAT WILL NEVER BE BUILT

If The Refuge master-planned community is changed from an upscale home development to a combination home/RV park neighborhood, the impact to property tax revenues will be significant.  These property tax dollars have a direct impact to the funds that support the school district.

Currently approximately 150 homes have been built at The Refuge and approximately 200 lots remain vacant.  Property taxes on the 150 homes average $5,000/year and taxes on the vacant lots average $2,000/year.  Approximately 40% of these taxes go to fund schools.  

At the present time, approximately $460,000/year is paid into school funds by Refuge property owners, based on the current build-out.  If property values decline by 20% as a result of the RV development, as has been suggested by real estate appraisers, the amount of property taxes going to the schools will decline by $100,000/year-- just based on the current build-out.

Conversely, a large number of lot owners at The Refuge are ready to build if the RV park is not approved. Many property owners put their building plans on hold as soon as they became aware of the RV park proposal.  If the remaining 200 lots are built out over the next five years, the total increase to fund schools under this scenario would be approximately $650,000 over that five year timeframe.

Based on these assumptions, the portion of property taxes going to the school funds would increase from $460,000 to $1,110,000 over five years if houses continue to be built, versus an estimated $500,000 decrease for that same timeframe if the RV park impacts property values as suggested.

In addition, the construction of approximately 30 homes per year during the next five years would create a significant increase in contractor and construction activity, not to mention additional dollars spent to landscape and furnish the new homes. 

If this land is annexed, subdivided and changed into the RV park that is being proposed, not only is it likely that the property values will decrease directly impacting property taxes, but it is also safe to say that a very large number of the current property owners at The Refuge will decide NOT to build homes there. 

Trading property taxes paid on million dollar homes for property taxes paid on RV pads? Your City Council says "it's a wash".  That is just not true.  Do you really think that the property taxes paid on RV pads that MIGHT someday be built will equal property taxes paid on million dollar homes?  Do you really think that RVers will bring in the same type of revenue stream to the City as people who are building, landscaping and furnishing houses? Think again. 

If this ordinance goes through, there will clearly be long-term financial consequences to the school funds as well as to the economy of Lake Havasu City in general.