K2 Well Not Dead



Brooke Utilities is now suing the Pine Strawberry Water Improvement District (District) for breach of contract on the K2 well project called the Joint Water Development Agreement (JWDA). The next and most likely final Arizona Corporation Commission (ACC) meeting is Dec. 16 and 17. If arbitration is in favor of PWCo, we the customers will pay dearly for all the costs incurred for recovery of attorney fees and legal costs, pending ACC proceedings relating to the K2 agreement, and costs incurred in performing the JWDA and reliance on its performance. Note that PWCo has spent our money on the K2 project prior to ACC approval, therefore illegally, on tree removal, light excavation and blue staking, etc.

The former District members were negligent to the public by signing this JWDA as they did not take into consideration any contingencies to protect themselves or we the people:

1) There were no contingencies in favor of the District in the event they needed to cancel the contract.

2) They specifically used the public’s money toward a utility and took actions to divert the funds to the driller and suppliers to make it look like PWCo was not spending the public’s money illegally toward a utility.

3) The District expressly waived its funding obligations of the public’s money when they deposited our money in escrow.

4) The District agreed that its lien interests were non-appealable to any decision of the ACC.

5) Terms of PWCo paying the District back the $300K for the K2 well is really a “loan” in disguise; even the ACC staff called it a loan in their letter for approval dated 9/7/07.

The current District members are trying their best to protect us now, but it may be too late. Your help is needed to speak up now, before the next ACC meeting. If approved, PWCo plans to start the K2 project of two wells in January.

Dina Galassini


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