The Star Valley Town Council will offer $400,000 for the Payson Water Company's facilities serving its community.
The Payson Water Company also serves other communities in the Rim Country.
Councilman Art Lloyd wanted assurances the town was only making an offer on the portion of the company operating in Star Valley.
Mayor Chuck Heron said the offer would be made only on the Payson Water Company with a certificate of operation for Star Valley.
The council voted unanimously Feb. 12 to have its contract attorney Marvin Cohen make the offer to Jay Shapiro, attorney for the water company, which is owned by Brooke Utilities.
The town had the water system appraised by Harold Morgan, a certified appraiser.
Cohen told the council Morgan "advised me that, despite his requests, he received no information whatsoever from Robert Hardcastle.
"All Hardcastle did was allow Morgan access to physically view the Star Valley system."
Hardcastle is the president of Brooke Utilities.
The formal appraisal information is confidential, however the offer was based on the number of meters the system reportedly has, as opposed to the number of customers indicated in various materials on file with the Arizona Corporation Commission and the Arizona Department of Environmental Quality.
The Arizona Corporation Commission had 137 to 140 customers listed for the Star Valley area, based on the 2007 Payson Water Company's annual report. The number of meters listed in the water company plant description was 364. A 2005 ADEQ mid -year inspection report listed the number of service connections as 241.
Morgan told Cohen the meter number is more reliable than the number of customers. There are more meters than the listed number of customers.
A portion of the funds to purchase the water company will come from a loan from the Water Infrastructure Finance Authority of Arizona (WIFA). "We may have to come up with some matching money," said Sarah Luckie, town clerk.
The match depends on how much WIFA has available for the community.
WIFA is an independent agency of the state of Arizona and is authorized to finance the construction, rehabilitation and/or improvement of drinking water, wastewater, wastewater reclamation and other water quality facilities and projects.
Generally, WIFA offers borrowers below market interest on loans for 100 percent of eligible project costs.