Full Report Changes View On Well Deal

PSWID board secretary says he would have voted against agreement with Pine Water

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Not all members of the Pine Strawberry Water Improvement District board had complete information when deciding to use $300,000 in tax money to explore the K2 Well in Strawberry.

"The information we received was filtered and we did not have the full story when we voted to approve the agreement with Pine Water Company," said board secretary Bill Haney.

At the most recent meeting of the PSWID, Oct. 18, Haney and board member Don Smith voted against endorsing the water company's request to the state to encumber a portion of its property as part of the K2 agreement. Haney said the new information led to the change in his point of view about the proposed well project in Strawberry.

The board's vote was 3-2 in favor of making the endorsement.

"The way our board is set up, the chairman only votes if there is a tie," Haney said. Chairman Gary Sherlock was absent, but participated by phone, so Vice Chair Barbara Hall was in charge, therefore did not vote.

"If Barbara had voted, I believe it would have been 3 to 2 the other way," Haney said.

Fred Krafczyk of the Rim Country Water group said they have some serious concerns about the voting that took place. He said by

phone, Chairman Gary Sherlock did cast a vote and Hall was incorrectly denied the right to vote. "This is just not acceptable," Krafczyk said. He added the matter of the vote and other concerns about the meeting is being explored by his group with the "appropriate authorities."

The corporation commission will have a hearing on allowing Pine Water Company to encumber property in regard to the K2 well agreement at 10 a.m., Friday, Oct. 26. The hearing is at 1200 W. Washington in Phoenix. It can be heard by telephone at (602) 542-0222.

The information referred to was presented by board members Wes Suhr and Jim Richey, who were assigned to negotiate the K2 agreement with Pine Water Company. It was shared with the public in a town hall-style meeting June 13.

"K2 Site Selection Reasoning. Mike Ploughe report May 30, 2006 ‘HWRC (Highland Water Resources Consulting) recommends site K1 as the optimum drilling site in the K2 area. However, HWRC is confident that each of the sites in the K2 area provides adequate opportunity for deep and perched groundwater production ... HWRC does not wish to diminish the opportunities presented by the K2 area as it appears to be a good location.' Mike Ploughe's report was peer-reviewed by additional hydrologists, with the same conclusion."

Haney said Suhr and Richey were told by the Pine Water Company, owned by Brooke Utilities, the peer reviews were confidential, proprietary documents and could not be shared with the rest of the board.

During the ongoing Arizona Corporation Commission hearings to allow several property owners to leave the Pine Water Company's service area, Administrative Law Judge Dwight Nodes ordered the peer review documents into the record.

"It was not until then, I saw the other hydrologists' reports," Haney said.

"I'd been concerned all along that the K2 site was not cost-effective, because it required deeper drilling, which would mean more power needed to lift the water and the risk factor," Haney said. Haney is with the City of Mesa Water Department.

He said he voted in favor of the agreement because there appeared to be no reasonable alternative, based on the information the district board had at the time.

A closer look at Ploughe's report on the K2 site shows he did not consider it the best alternative.

"A caution should be taken when considering the drilling of deep regional aquifer wells in the Strawberry area, as water rights and environmental concerns may arise if significant production capacity is committed. With this in mind, many opportunities currently exist in the Pine area for development of the deep regional aquifer at a significant lower cost and risk than in Strawberry.

"HWRC recommends that the K2 site be drilled once the following lower-risk opportunities are explored where the water is needed:

  • Conduct a hydrogeologic investigation to identify at least three optimum, deep regional aquifer drilling sites in the Pine area.
  • Explore and define the opportunities for partnerships with other local Domestic Water Improvement Districts and/or private entities which may currently be in possession of deep regional groundwater supplies or that may be considering the drilling of a deep regional groundwater well in Pine.
  • Explore and define the opportunities for partnerships with federal and/or county governments.
  • Explore and define the opportunities for any combination of partnerships above.
  • Prioritize resulting opportunities.
  • Investigate the legality of any such potential arrangements and define a legal path to successful delivery of the new long-term water source to the community of Pine in the most feasible manner possible."

Morrison Maierle Inc. and Clear Creek Associates reviewed Ploughe's report.

Morrison Maierle concluded, "the K2 site appears to be a reasonable site to drill a well into the R-aquifer of the deeper strata.

"It is impossible to know what a well drilled into the R-aquifer at the K2 site will yield. However, there are favorable conditions at the site that suggest it may provide similar yields to the Strawberry Hollow and Milk Ranch wells completed in the R-aquifer and deeper strata.

"Drilling depths to the R-aquifer will be less in Pine, than in Strawberry, a fact noted by the subject HWRC report.

"In summary, the K2 site recommended in the HWRC report appears to be a reasonable location ... It is not without risk ..."

Morrison Maierle, in a later communication with Pine Water Company said the K2 site is attractive as an exploration target and reiterated the high risk it would involve.

Clear Creek Associates said the likelihood of K2 producing 150 gallons per minute of sustainable groundwater is not well supported.

"Due to the potential for Strawberry-area wells to impact the flow of groundwater to Fossil Springs or other surface water seeps and springs, and also due to the more favorable reported aquifer characteristics in the Pine area, it is our opinion that a deep aquifer resource in the Pine area would be more favorable than a deep aquifer water resource located in the Strawberry area," Clear Creek Associates wrote.

Haney said the water problem "has gone from being a technical issue to being a potential issue."

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