The eyes of city officials from across the state are watching the outcome of a recent lawsuit filed against Arizona’s attorney general and state treasurer.

The suit, filed in Arizona Superior Court by Tucson Mayor Jonathan Rothchild, is a result of Attorney General Mark Brnovich’s threat to withhold state shared revenues as a result of Senate Bill 1487. That law, which went into effect in August, prohibits cities from passing laws that conflict with state laws. This issue stems from Tucson’s practice of destroying seized weapons, which contradicts state law.

The lawsuit states that withholding shared revenues violates the state’s constitution.

“The city depends on receipt of state shared revenues from the state to meet budget obligations and provide services to its residents, businesses and visitors,” the lawsuit states. “If the city is denied SSR, it will be unable to meet its obligations to employees [payroll and pension payments], maintain parks and roadways, and provide necessary municipal services [police and fire services] as well as discretionary municipal services.”

In all, Tucson could lose more than $115 million in shared revenues — nearly a quarter of its annual operating budget.

Sedona City Attorney Robert Pickels has spoken out against SB 1487 on several occasions, calling it draconian and one of the worst pieces of legislation he’s ever see.

“I’ve said this before that 1487 puts us in the position of governing out of fear,” he said last week. “We’re in a position now that we have to be cautious about everything.”

He said the general purpose of SB 1487 was to establish uniformity of laws throughout the state but in the end, it’s much more complicated than that. Pickels said that he doesn’t feel any potential changes to the law will be made during this year’s legislative session until the court has ruled on the Tucson lawsuit.

SB 1487 states that, “At the request of one or more members of the legislature, the state attorney general shall investigate any ordinance, regulation, order or other official action adopted or taken by the governing body of a county, city or town that the member alleges violates state law or the Constitution of Arizona.”

It goes on to state that the attorney general shall make a written report of findings and conclusions as a result of the investigation within 30 days after receipt of the request. A copy of the report will be provided to the governor, the president of the senate, the speaker of the house of representatives, the member or members of the legislature making the original request and the secretary of state.

If the attorney general concludes that a violation has been made to any provision of state law or state constitution, the attorney general shall provide notice to the violating party and shall indicate that is has 30 days to resolve the violation.

If the AG determines that the county, city or town has failed to resolve the violation within 30 days, the state treasurer will be notified to withhold and redistribute state shared monies. In the case of Sedona, that equates to nearly $2.1 million this fiscal year and is distributed to the city monthly in equal installments.

“I think every individual city has to determine what the relevant impact would be to them,” Pickels said in regard to the outcome of the Tucson lawsuit.

If Tucson is successful in proving this goes beyond the authority of the legislature, he said it will set a precedent for the future viability of SB 1487.

The League of Arizona Cities and Towns has intervened on behalf of all 91 cities in the state because its deemed SB 1487 unconstitutional and not just for charter towns but all cities statewide.  

“I’m optimistic at this point that this lawsuit will at least set a significant tone of how 1487 is considered, or reconsidered, when moving forward,” Pickels said. “If the court strikes it down and says its unconstitutional, I think cities will be satisfied that justice has been served.”

Late last year, the Sedona City Council repealed its ordinances in regard to short-term vacation rentals and accessory dwelling units to avoid being in conflict with state law. Pickels said there are no other major laws or ordinances on the books that’s he’s concerned may be in conflict. But that’s not to say that one may not arise in the future.

“Nothing has percolated to the surface that would need to be fixed immediately,” he said. “We don’t have the resources to go through every ordinance line by line to determine what may or may not be a violation. What we’ll do is take a more reactive posture and as things may be identified, we’ll review them and if necessary, fix them.”

He said that as the city proceeds with updating the Land Development Code, that may be a time to review issues to ensure they are in compliance with state law.