SAN TAN VALLEY, AZ — The San Tan Valley Town Council unanimously approved an increase in financial assistance from the Town of Queen Creek on Wednesday, raising the maximum monthly financial assistance from $250,000 to $450,000. The vote expands a temporary arrangement that allows Queen Creek to pay San Tan Valley’s bills while the town builds its own financial infrastructure.
Why the Increase Was Needed
Town Attorney Allen Quist told the council that software costs and expanding ESI payroll were the primary drivers pushing expenses toward the $250,000 cap. Billingsley added that Arizona State Retirement System (ASRS) enrollment and employee benefits packages would compound those costs significantly.
“Software is expensive, everybody,” Mayor Daren Schnepf said. “Coming from a computer background, I understand that part of it — but it’s also a crucial tool for us to have in the town.”
Additionally, the town is onboarding several director-level employees through ESI, its staffing firm, this month. Billingsley said benefits, pension contributions, and insurance costs would climb sharply as staff grows.
“Once we start having our own insurance and long-term disability, those costs are going to go like that,” Billingsley said. “Very quickly, a $250,000-a-month stipend does not cover some of those costs as we transition over.”
“We want the flexibility to be able to cover some of those big expenses that may come,” Quist said.
Addressing Speculation: Is Queen Creek Making Money From the Deal?
Before the vote, Vice Mayor Tyler Hudgins asked staff to clarify how much interest San Tan Valley had paid to Queen Creek.
“There’s been some speculation that Queen Creek’s making a bunch of interest and money off of us,” Hudgins said. “Can we just get a clarification on how much interest we’d actually pay to date?”
At a February 19 work session, Billingsley reported that the town had borrowed a total of $1.405 million from Queen Creek to that date. Total interest on that amount was $1,200.
The March 4 figures reflect what has been formally drawn under the IGA specifically. Quist said Queen Creek provides monthly reports, which the town reviews and audits. The most recent report available was from January 2026; the February report had not yet been received at the time of the meeting. Through January, San Tan Valley had drawn $315,457 under the IGA. Interest accrued on that amount was $1,232.
Queen Creek is not charging San Tan Valley for the staff time required to process invoices and issue payments.
“Please keep in mind that Queen Creek is doing the administration,” Quist said. “They are processing these invoices, paying them — they’re using staff to do that for us. Once we do it in-house, there will be staff time and costs associated with that.”
Hudgins said, “So it’s likely they’re actually losing money because they’re doing our accounts payable as a result of doing this.”
Quist said, “They’ve been a great neighbor.”
Mayor Schnepf said, “We’re sending invoices over to them, and they are paying those invoices to those we need to get paid — because we have nothing to start off with. That’s been a great opportunity for us to work with the Town of Queen Creek.”
Councilmember Rupert Wolfert echoed that sentiment. “They are really going out of their way to ensure that we do get stood up in a very stable manner,” he said.
How the Loan Works
The Town of San Tan Valley entered into a formal Intergovernmental Agreement (IGA) for Financial Assistance with Queen Creek on November 5, 2025. Under that agreement, Queen Creek issues payments on San Tan Valley’s behalf for approved obligations, up to $250,000 per month. The amounts advanced accrue interest at 4% APR.
The amendment approved Wednesday, Resolution No. 2026-08, increases that monthly cap to $450,000. All other terms remain unchanged.
Councilmember Brian Tyler asked about repayment terms. Quist said repayment begins in November. According to the original IGA, that deadline is November 1, 2026 — or earlier, once San Tan Valley begins receiving all major categories of state-shared revenues, whichever occurs first. Minimum monthly payments are $250,000 until the full balance, including accrued interest, is satisfied.
San Tan Valley will continue submitting invoices and documentation to Queen Creek, which will remit payments directly to vendors, contractors, and service providers. Once the town has its own financial systems in place, it may request that Queen Creek send funds directly to the town instead.
Councilmember Wolfert moved to approve Resolution No. 2026-08, “authorizing the Mayor to execute Amendment No. 1 to the Intergovernmental Agreement for Financial Assistance with the Town of Queen Creek, increasing the maximum monthly financial assistance amount to $450,000.” Councilmember Gia Jenkins seconded the motion. The council voted unanimously in favor.
Budget Timeline and Self-Sufficiency
The council also approved the town’s tentative interim budget earlier in the same meeting, setting a spending limit of $14.725 million through June 30, 2026 — the end of the current fiscal year. Finance Director Gabe Garcia presented the budget, which includes $10 million in the general fund and $4.725 million in restricted highway funds.
However, the town cannot spend any of its own money until the budget is formally adopted. A public hearing is scheduled for April 1, 2026, after which the council is expected to adopt the budget. Spending authority would begin April 2.
At the February 19 work session, Billingsley said, “We need to get over to spend our own money, because pretty soon we’re going to outpace our ability to borrow from Queen Creek.”
