Star Valley To Force Sale Of Water Company

Town council approves condemnation of facilities after water company rejects $475,000 offer

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The Star Valley Council on Tuesday unanimously agreed to ask a judge to force Brooke Utilities to sell the town the facilities serving about 304 customers, a key step in putting the water-conscious town in the water delivery business.

Star Valley had offered the private water company $475,000 for the local chunk of the Payson Water Company, based on a certified appraisal of $400,000, plus the estimated $75,000 it would cost to go through a condemnation and forced sale. That offer put the value of the company at about $1,500 per meter.

Brooke Utilities Company President Robert Hardcastle rejected that offer and in a letter to the town had suggested that water districts in the Valley had sold for $4,000 to $5,000 per meter. That letter suggested the water company wouldn't invest resources in responding to an offer of less than $3,000 per meter. At that price, the company would cost Star Valley about $916,000.

Town Attorney Tim Grier said the town will file a complaint in superior court in the next week or two, which begins the process of proving to a court that the town must take over the water company in the public interest.

Brooke Utilities spokeswoman Myndi Brogdon declined comment on the condemnation at the council meeting, but later said that the company remains open to continued negotiations on a fair price.

"We look forward to receiving a more reasonable offer," she said.

The water company serves perhaps 10 percent of the town, where most people get their water from their own wells. However, owning the water company will make Star Valley a water-seller, which gives it new status for participating in regional water planning efforts.

For instance, the town can't contract with the Salt River Project for water from the Blue Ridge Reservoir unless it's in the water delivery business. Concern about other entities, like Payson, drawing on Star Valley's reliable, relatively shallow underground water supply played a key role in sparking incorporation.

Town Manager Vito Tedeschi said that he didn't know of a single case in which a court had rebuffed a town's effort to take over a private water company providing service within a city's limits. He said the town will have to demonstrate that the takeover is in the public interest. He cited as one basis for the action Brooke Utilities' move last summer to pump water out of wells in Star Valley to haul to Pine and Strawberry, when well levels dropped.

Star Valley has since slapped weight restrictions on many of the roads that Brooke Utilities might use to conduct water hauling again this summer, on the grounds that the heavy water trucks damaged the roads.

Brogdon attended the council meeting, but didn't rise to speak -- even when Mayor Chuck Heron asked her pointedly whether she had any comment on behalf of the company before the council voted to go to court.

In an interview, she said the company was willing to continue discussions at figures less than the $916,000 implied in Hardcastle's letter.

"We're always open to conversation -- the worst thing we can do is say no. We're always open to conversation on other numbers," said Brogdon.

"But if this is a step they feel they need to take -- that's fine. We'll move forward."

She said the company will prepare an appraisal of its Star Valley operations, but declined to discuss the basis of that appraisal or to comment on why the company disagrees with the value put on its facilities by the California appraiser hired by the town.

The process could easily grind on for years, she noted.

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