Consultant Details Water Company Buyout

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About 150 Pine and Strawberry residents gathered at the Pine Community Center last Wednesday evening for a presentation on the feasibility and cost of acquiring the Pine and Strawberry water companies.

Dan Jackson of economists.com, the company hired by the Pine-Strawberry Water Improvement District to evaluate purchasing the companies, told the group that acquiring the system would cost customers an additional $8.60 per month on their water bills in 2005, with additional increases of $3.71 in 2006 and $2.07 in 2011. Other financing options include impact fees, whereby new customers pay a higher share of expansion costs, and assessments allocated to each property based on benefits received.

"The general reaction was, ‘Gee, that's pretty cheap,'" Strawberry Hollow Water Improvement District Chairman Loren Peterson said. "It's my understanding that most people's bills would actually go down."

Jackson told the assemblage there are numerous benefits to public ownership, including:

  • While private sector ownership is often more effective and efficient than public sector ownership, water is an exception to the rule because it is a natural monopoly.
  • It is usually not economically efficient to have more than one water provider in a given area.
  • As a nonprofit entity, all excess revenues can be devoted to improving the system.
  • An elected board of directors will set policy according to the will of the ratepayers.

A fact sheet prepared by the Pine-Strawberry Water Improvement District estimated that the price to purchase the two companies would be approximately $12,120,000.

A petition currently being circulated asks the Pine-Strawberry Water Improvement District (PSWID) to acquire the Pine and Strawberry water companies, both owned by Brooke Utilities.

According to Peterson, who is involved in the petition drive, the goal is to secure the signatures of a majority of the property owners serviced by the two companies to show Gila County that there is public support for such a move.

"Gila County really can't do anything unless they think it's what the people want, so that's why this whole petition thing," Peterson said.

Pine Water hearings changed

The evidentiary hearing on the Pine Water Company rate increase scheduled for Jan. 15 has been rescheduled. It will now be held at 9 a.m., March 3, at the offices of the Arizona Corporation Commission in Phoenix.

The schedule change is due to "unresolved discovery disputes," according to Heather Murphy, public information officer for the Arizona Corporation Commission. They were made at another procedural conference.

"Discovery is a legal process where the parties request certain documents from each other, and in this case Brooke Utilities provided responses to all of our staff data requests, but at the time of the procedural conference, the (Pine-Strawberry Water Improvement) District had not had time to review all of those," Murphy said.

"Another item of contention was that the district was seeking information over a five-year period. The company argued it should be limited to the test year and the year prior. The judge split the difference and said, ‘OK, provide three years, and if that doesn't resolve your dispute, meet back here and we'll have this out in front of me.'

Murphy said that hearing delays can actually end up saving time.

"The last thing you want is for parties to come to a hearing unprepared to litigate the issues or answer the questions or cross examine on issues that are important to the case. Giving them more time gives an opportunity for everyone to arrive ready to proceed."

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