                                IN THE
              ARIZONA COURT OF APPEALS
                             DIVISION ONE


                             JOE E. PRICE,
                           Plaintiff/Appellant,

                                    v.

                 CITY OF MESA, a municipal corporation,
                          Defendant/Appellee.

                         No. 1CA-CV 14-0274 A
                            FILED 12-02-2014


           Appeal from the Superior Court in Maricopa County
                            CV2013-094063
                 The Honorable David K. Udall, Judge

                              AFFIRMED


                              COUNSEL

Joe E. Price, Mesa
Plaintiff/Appellant

Gust Rosenfeld, PLC, Phoenix
By David A. Pennartz, Landon W. Loveland, Charles W. Wirken,
Sarah C. Smith
Counsel for Defendant/Appellee
                             PRICE v. MESA
                            Opinion of the Court



                                 OPINION

Presiding Judge Patricia A. Orozco delivered the opinion of the Court, in
which Judge Randall M. Howe and Judge Maurice Portley joined.


O R O Z C O, Judge:

¶1             Joe E. Price appeals the grant of summary judgment in favor
of the City of Mesa (Mesa). For the reasons that follow, we affirm.

¶2             In this opinion, we construe and apply Arizona Revised
Statutes (A.R.S.) sections 28-7691 through -7697 (West 2014)1 and Article 7,
Section 13 of the Arizona Constitution and hold that Mesa was not required
to obtain voter approval before issuing notes, to finance a light rail
extension project.

                FACTS AND PROCEDURAL HISTORY2

¶3              In January 2014, the Mesa Mayor and City Council passed
Resolution Number 10380. The resolution authorized the issuance of
Transportation Project Advancement Notes (TPANS) to advance project
costs for a 1.9 mile light rail transit extension on Main Street from Mesa
Drive to Gilbert Road and a “Park-and-Ride” lot for light rail patrons. The
resolution required Mesa to secure payment on the TPANS’ interest and
principal by a pledge of “Transportation Project Advance Revenues”
(TPARS) and “excise taxes” as defined in A.R.S. sections 28-7691 through -
7697. The resolution further noted that TPANS did not constitute “an
obligation . . . to levy or pledge any form of ad valorem property taxation
nor will [they] constitute an indebtedness of the City . . . within the meaning


1     We cite the current version of applicable statutes when no revisions
material to this decision have since occurred.

2       Price’s opening brief fails to cite to the record as required by Rule
13(a)(4) of the Arizona Rules of Civil Appellate Procedure. Thus, we
disregard the brief’s statement of facts and rely on Mesa’s statement of facts
and our own review of the record. See Sholes v. Fernando, 228 Ariz. 455, 457
n. 2, ¶ 2, 268 P.3d 1112, 1114 n. 2 (App. 2011). Moreover, we disregard those
portions of Price’s reply brief not “strictly confined to rebuttal of points
made” in Mesa’s answering brief. See ARCAP 13(c).


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                             PRICE v. MESA
                            Opinion of the Court

of the Constitution of the State of Arizona . . . but shall instead be limited
obligations payable solely out of the pledged sources of funds . . . .” The
project was also to be partially funded with repurposed federal
transportation grant funds, which would be used to pay off the TPANS
early “if and when received.”

¶4             Price, a Mesa resident, brought suit claiming that Mesa’s
funding sources were “uncertain and will likely be insufficient to fund the
Light Rail extension[.]” Moreover, Price argued that Mesa would have to
issue general revenue bonds to fund the project and that the extension
“cannot occur without putting the taxpayer approved bonding programs,
already submitted and approved by the voters, in jeopardy.” Price further
argued that Mesa’s proposed sale of notes required an election under
Article 7, Section 13 of the Arizona Constitution.

¶5             Mesa maintained that it only intended to pledge excise tax
revenues to repay the TPANS and that doing so would not render Mesa or
its taxpayers directly liable for their repayment. Mesa also argued that
because it did not assume “a general liability to repay the borrowing,” the
TPANS financing scheme was not subject to the indebtedness limit or the
constitutional election requirement of Article 9, Section 8 and Article 7,
Section 13 of the Arizona Constitution, respectively.

¶6             Both parties moved for summary judgment and agreed that
there were no genuine disputes of material fact. The trial court granted
Mesa’s motion, finding that the TPANS are not general debts or general
obligations bonds and thus, Mesa was not required to obtain voter approval
before issuing them. Price timely appealed and we have jurisdiction under
Article 6, Section 9 of the Arizona Constitution and A.R.S. §§ 12-120.21.A.1.
and -2101.A.1 (West 2014).

                               DISCUSSION

¶7           Price argues that the trial court’s order granting Mesa’s
motion for summary judgment was “directly contrary to the statutes and
federal regulations applicable to this case.”3 We review the grant of


3       Arguments not presented to the trial court are generally waived on
appeal. Price argues that Mesa failed to comply with federal securities
regulations, but did not present this issue to the trial court. We deem it
waived on appeal. See Airfreight Express Ltd. v. Evergreen Air Ctr., Inc., 215
Ariz. 103, 109, ¶ 17, 158 P.3d 232, 238 (App. 2007) (holding that parties must
first raise arguments to the trial court so that it may rule on the issue).


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                            Opinion of the Court

summary judgment and questions of law, including the interpretation of
statutes, de novo. Maycock v. Asilomar Dev., Inc., 207 Ariz. 495, 498-500, ¶¶
14-24, 88 P.3d 565, 568-70 (App. 2004). In reviewing issues of statutory
construction, we look to the statute’s plain language to determine its
meaning. Koss Corp. v. American Express Co., 233 Ariz. 74, 79, ¶ 12, 309 P.3d
898, 903 (App. 2013).

I.     Light Rail Extension

¶8             Government entities may enter into transportation project
advance agreements and issue and sell TPANS. A.R.S. § 28-7692. However,
state statutes authorizing TPANS do not expressly require government
entities to obtain voter approval before doing so. See A.R.S. §§ 28-7691 to -
7697. When a statute is silent on an issue, “’we will not read into [it]
something which is not within the express manifest intention of the
Legislature as gathered from the statute itself,’ nor will we ‘inflate, expand,
stretch or extend the statute to matters not falling within its expressed
provisions.’” Ponderosa Fire Dist. v. Coconino Cnty., 235 Ariz. 597, 603, ¶ 30,
334 P.3d 1256, 1262 (App. 2014) (internal citations omitted).

¶9             Because the legislature was silent on this issue, we presume
it did not intend to require municipalities to hold elections before issuing
TPANS. This conclusion is further supported by other statutes that
explicitly require municipalities to obtain voter approval before employing
other financing options. See, e.g., A.R.S. §§ 48-682 and 9-523.

¶10            However, Price argues that Mesa has “attempt[ed] to
mischaracterize [its] financial obligation . . . [and] avoid the voter
requirement of an election for the approval of this bond debt to finance a
public utility undertaking[.]” The trial court correctly identified the issue
as follows:

       The central question in this case is what [Mesa] has pledged
       as security to repay its obligation. If it is a general obligation
       of [Mesa] and its property owners, [Mesa] would have needed
       to have an election prior to its approval of its funding
       mechanism for the second extension of the [Light Rail Transit
       System]. However, if it is a limited pledge of excise tax for a
       limited purpose, it would not qualify as a general debt [of
       Mesa], and, therefore, no special election would be necessary.

¶11          The Arizona Constitution governs election requirements for
general obligation bonds. “Questions upon bond issues or special
assessments shall be submitted to the vote of real property tax payers, who


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                              Opinion of the Court

shall also in all respects be qualified electors of this state, and of the political
subdivisions thereof affected by such question.” Ariz. Const. art. 7, § 13.

¶12            “The purpose in requiring an election on general obligation
bond issuances is to provide the electors of an affected district with a voice
in accepting or rejecting a proposed expenditure which they ultimately may
bear.” Tucson Transit Auth., Inc. v. Nelson, 107 Ariz. 246, 248, 485 P.2d 816,
818 (1971). However, bond issues and special assessments that are not
directly charged against Mesa and do not increase its indebtedness are not
under the purview of Article 7, Section 13 and thus do not require an
election. See id. at 249, 485 P.2d at 819.

¶13            The legislature has already established that TPANS are not
general obligations. A.R.S. § 28-7697.A. Instead, TPANS are “limited
obligations of the issuer of the notes and are payable solely from [TPARS]
received by the political subdivision and . . . other monies lawfully
available for application to that purpose[.]” A.R.S. § 28-7697.B.

¶14          Mesa has a limited financial obligation in this case because it
has only pledged to pay the TPANS interest and principal with TPARS and
excise taxes, which are distinct from Mesa’s general funds. TPARS
constitute “any revenues a political subdivision receives under a
transportation project advance agreement, or as proceeds of [TPANS],
together with any earnings from the investment of revenues.” A.R.S. § 28-
7691.5. Excise taxes are:

       [A]ll unrestricted excise, transaction, franchise, privilege and
       business taxes, state shared sales and income taxes, fees for
       licenses and permits and state revenue sharing that are levied
       and paid by a political subdivision or contributed, levied or
       paid to the political subdivision and not earmarked by the
       contributor or the political subdivision for a contrary or
       inconsistent purpose.

A.R.S. § 28-7691.1.

¶15            Political subdivisions issuing revenue bonds assume no
actual or potential liability. Nelson, 107 Ariz. at 251, 485 P.2d at 821.
Revenue bonds made payable with revenue from the project itself, state and
city contributions from fees, penalties and excise taxes already in existence,
and revenues from a constitutionally authorized fund that is distinct from
general state revenues do not require voter approval. Id. Moreover,
“municipal revenue bonds or obligations payable out of a special fund
separate from the city’s general funds do not require an election before they


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                            Opinion of the Court

may be issued[.]” City of Tucson v. Corbin, 128 Ariz. 83, 87, 623 P.2d 1239,
1243 (App. 1980). Because Mesa did not pledge its general funds, it was not
required to obtain voter approval before issuing the bonds.

II.    Parking Lot

¶16             We next turn to whether Mesa was required to obtain voter
approval before issuing TPANS to advance the construction costs of the
Park and Ride parking lot. Price argues that the proposed parking lot is a
utility undertaking requiring voter approval. Under A.R.S. § 9-523,
“[q]uestions on bond issues under this article shall be submitted to the
qualified electors of the municipality.” Such bond issues include “utility
undertakings,” which include, in relevant part, “[a]irport buildings or other
airport facilities or buildings or structures to provide off-street parking of
motor vehicles[.]” A.R.S. § 9-521.5(b).

¶17           Assuming without deciding that the parking lot qualifies as a
utility undertaking, Mesa was not required to obtain voter approval under
A.R.S. § 9-523. Mesa issued TPANS and not municipal bonds under A.R.S.
§ 9-521 to finance construction. Also, for reasons discussed above, the
TPANS Mesa proposed to finance the parking lot are not general
obligations, and thus, voter approval is not required.

                              CONCLUSION

¶18        We affirm the trial court’s granting of Mesa’s motion for
summary judgment.




                                  :gsh




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