Sonoran News article

A new article published today documents the $5.5million loan application that was authorized by the Cave Creek Town Council, intended for capital improvements.

Council also voted unanimously to approve a resolution authorizing the application for a new Water Infrastructure Finance Authority Loan (WIFA) in the amount of $5.5 million, which Marlow stated is to increase the water system’s capacity and redundancy.

Although the $5.5 million was budgeted, Abujbarah said the town would be coming back to council for an additional $5 million.

Jay Spector, former executive director of WIFA, now with the Wall Street investment banking firm RBC Capital Markets, has remained involved with putting together the town’s financing packages.

He explained to council the authorization is different than that which was previously approved and obtained in 2006, but the loan would be structured the same.

Although they will not know the interest rates until the Wednesday before closing, Spector said it would be discounted 15 percent and said it could be around the same rate as their existing loans.

Spector stated some adjustments were made from CH2MHill’s previous calculations, based on the town terminating its contract with Arizona American and said, “There’s more than enough revenue to pay for both loans.” Council voted unanimously in favor of authorizing the application for the loan, with some council members stating, “because it is only approving the application,” while they all stressed they would have liked to have seen the revenue reports and asked for copies before the loan comes back to council for approval.

During public comment Charles Spitzer said, “The public authorized $50 million.” Citing it was now $72 million for a town of less than 5,000, Spitzer asked, “When will it stop? When will the town have some fiscal responsibility?” Councilwoman Grace Meeth commented, “We knew the system was decrepit when we bought it.” Francia pointed out that WIFA does not allow any “wiggle room” as conventional financing might and said, “Either you have the revenue or you don’t.”