We did not ask for nor do we choose to be annexed into Queen Creek. We are a large and increasing number of residents living in a development named Encanterra located in unincorporated San Tan Valley close to the southeastern border of Queen Creek. On May 3, 2018, a handful of residents living in Encanterra took it upon themselves to make a preliminary application with the Town of Queen Creek to annex Encanterra as well as other adjacent farmland, Fry’s Marketplace, and the medical plaza on the Encanterra side of Gantzel Road. Later on June 5, this same group filed a formal application for this purpose. Subsequently, the annexation map was revised two more times, each time eliminating some of the adjacent land until it included only Encanterra.
Also on May 3, Encanterra’s developer Shea Homes announced to Encanterra residents that Shea was also in favor of this annexation effort. We do not know what if any financial incentive Shea Homes may be seeking from Queen Creek. In the case of another development Ironwood Crossing, which was annexed by Queen Creek earlier this year, that developer Fulton Homes was paid approximately $13 million by the Town of Queen Creek for reimbursement of certain infrastructure development costs relating to Ironwood Crossing.
We are opposed to annexation into Queen Creek at this time for a number of reasons. First, we do not want to have to pay higher taxes. Queen Creek’s own town managers told Encanterra residents that annexation by Queen Creek would result in our taxes increasing on average approximately $900 per year per residence. Many of us feel the estimate is closer to $1,200 per year. Queen Creek’s town management said its revenues from an annexation of Encanterra would increase Queen Creek’s revenues $2.7 million per year from state and county-shared revenues and sales taxes and public safety property taxes levied on Encanterra residents. Encanterra residents would receive little of value in return as Encanterra’s HOA would continue to be responsible for maintaining Encanterra’s roads which are privately owned by Encanterra. Living in unincorporated San Tan Valley, we pay only state and county sales tax equal to 7.2% on purchased items. In San Tan Valley, there is no tax charged on food for home consumption. If annexed by Queen Creek, because of its city sales tax of 2.25% on most items, our sales tax rate for purchases we make in Encanterra, including our on-line purchases, would increase to 9.45%. This tax rate would apply to Encanterra golf and social membership dues, utilities, food and beverages, and any other services purchased in Encanterra. There would also be a 5% franchise tax charged on our cable television and Internet services.
Another reason we are opposed to annexation by Queen Creek is our concern about Queen Creek’s current level of funded debt of $230 million and its unfunded pension liability calculated at $41 million, which is significantly understated due to liberal assumptions used on the rate of return on its securities portfolio earmarked for present and future pension claims. This debt offers no benefit to Encanterra residents. We are concerned that an economic downturn would increase pressure on the Town of Queen Creek to raise its property tax and/or sales tax rates to maintain its debt service coverage requirements with its bondholders. Queen Creek sales tax rates are already considerably higher than a number of other east valley cities like Chandler, Gilbert, Mesa, and Scottsdale.
he Encanterra residents’ pro-annexation group has tried to scare Encanterra residents into supporting Queen Creek annexation by claiming it is only a matter of time before there will be another San Tan Valley incorporation effort. This is a scare tactic and bogus argument as it is already known that Shea Homes was opposed to Encanterra being included in an earlier San Tan Valley incorporation effort and would use its power as a HOA declarant to kill any such effort that includes Encanterra as long as Shea continues to be in control of the HOA which is at least another five years until the development is built out. While an incorporation effort excluding Encanterra is quite possible, we would not be opposed to seeing such an effort succeed as long as the organizers could show a vision with a bright future and reasonable taxes.
Another scare tactic used by the pro-annexation group is their claim of the likelihood that Florence or Apache Junction could annex Encanterra. That too in our opinion is a bogus argument, as this would require approval by a majority of property owners living in the impacted area. We feel it is unlikely that San Tan Valley residents would be inclined to approve an annexation into either Florence or Apache Junction.
While Queen Creek is a growing attractive and progressive town, for the reasons mentioned above, annexation by Queen Creek does not represent a good financial decision for Encanterra residents at the present time. In another four or five years, as San Tan Valley and Queen Creek continue to be developed, it will be easier for Encanterra residents to ascertain whether annexation by Queen Creek represents a better alternative than remaining part of unincorporated San Tan Valley, or as part of a new city of San Tan Valley, if an incorporation effort was to successfully occur.
We truly like living in unincorporated San Tan Valley. We like the fire and medical services we receive from Rural Metro and police protection we receive from Pinal County Sherriff’s Office. We like the positive outlook we have for San Tan Valley under Pinal County’s supervision. We feel Encanterra residents already enjoy everything Queen Creek has to offer without us having to pay higher taxes. This annexation effort has created a lot of turmoil in our community pitting resident against resident. Many of us living here resent that a small group of residents have been able to create so much dissention in what otherwise we have found to be an enjoyable community to live in. We are hopeful Queen Creek town managers will turn down the application for annexation so we can all see this matter go away and we can go back to enjoying our community.