Town Starting Negotiation To Purchase Water Facilities

$400,000 bid to buy water company would prepare for growth


Star Valley this week started negotiations to buy out the privately owned water company that serves about 10 percent of the town's residents, based on a just-completed appraisal that put the value of the company at $400,000.

Although the Payson Water Company refused to allow the town's contract appraiser to do anything more comprehensive than look at its facilities and despite widely different customer figures filed by the company itself, the appraiser set the company's value by relying on 364 water meters listed on a company report. The town wants to buy all of the Brooke Utilities infrastructure that is within the town limits of Star Valley.


A January storm sent high flows down Schoolhouse Creek in Star Valley, shown in this file photo. The winter rains increased well levels significantly, in a town where about 90 percent of the residents rely on well water. Recently, the town made the first move toward acquiring the privately run water company that provides water to about 10 percent of the residents as the first move towards building a water infrastructure to serve future growth needs.

Jay Shapiro, the attorney for Brooke Utilities Inc. which owns a bevy of small water suppliers owned by Robert Hardcastle, said Hardcastle had received the bid and would consider the town's offer. He declined to make any prediction on how long it will take the company to respond, but suggested it would probably be "weeks, not months."

The appraisal and opening of negotiations represents a key step in the new town's effort to build or buy a basic municipal infrastructure. The town council is working toward ensuring it has the infrastructure for water and sewers -- mostly to handle high-density uses along the highway and new developments, said Mayor Chuck Heron.

"We know we want to have a municipal water company. As a municipality, if you have your own water company, you have a lot better standing in court in terms of securing water rights," said Heron.


Chuck Heron

The mayor said that the town has set aside $400,000 for the purchase.

However, it is not clear if Hardcastle wants to sell one of the best-developed water companies in his rural empire.

In addition to a tight-lipped reluctance to comment, the Payson Water Company provided little cooperation for appraiser Harold Morgan. The company has reported to the Corporation Commission customer totals that have ranged from 137 to 266 -- all of which are fewer than the 364 water meters listed on the Water Company Plant Description submitted to the Corporation Commission, according to a letter from the town's contract attorney.

Currently, most Star Valley residents get water from privately owned wells.

He said the town has no intention of "running lines out to people who have been pumping their own well water for 20 years" and trying to sell them water.

However, buying the water company would give the town a start on a system needed to serve new growth, especially along the highway.

"Where I see it being plumbed in is where someone would build a new apartment building -- we could hook that up," said Heron.

But first the town will have to talk Hardcastle into selling off a piece of an empire of small, Rim Country water companies. For instance, Hardcastle owns the Pine and Strawberry water companies, which ran low on water this summer and ended up pumping water out of wells in Star Valley and hauling it to customers in Pine and Strawberry, who had to pay four or five times as much for the water as they would if it had come through the pipes.

Heron said that the town was upset at the damage the heavily laden water trucks did to the roads, but that unlike many communities served by Hardcastle companies, the residents of Star Valley had few serious complaints about supply or service.

"We've not been in that loop of people complaining about Brooke Utilities -- I don't think anyone in Star Valley has really complained, except when he was taking water from the Knolls and the trucks were tearing up the roads."

Meanwhile, the town is also grappling with the need for a sewage treatment plant.

Currently, almost everyone in Star Valley relies on buried septic tanks to treat their sewage. Such passive systems can't generally handle high-volume commercial operations, so the lack of a sewage treatment plant and a collector system sharply limits the types of businesses that can be approved anywhere in town, especially along the highway.

Some experts have said that so many buried septic tanks pose a potential problem for Star Valley, since the top of the underground water table comes to within nine feet of the surface in some places. Leaking septic systems could potentially pollute that underground water that supplies almost all residential water needs in the town.

However, Heron discounted any problem, noting that required monitoring stations have never shown any contamination of Star Valley groundwater from leaking septic leaching fields.

He said both a town-owned water company and some sort of a sewage treatment system remain essential to supplying future growth.

"They're kind of on parallel paths -- the water system was picked first because, at least in part, it does exist already," he said.

Heron said the town is looking into how it might finance a sewer system.

The town is hoping to convince the federal government to sell at a reduced rate land in the south end of town that could serve as the site of a future sewage treatment plant.

"We want to make provisions for sewage treatment, we just don't yet know the best way to go."

Heron said the town hasn't yet opened negotiations with the federal government, although a citizens' committee is working on identifying 640 acres that the federal government can sell the town at a reduced rate under the terms of the Township Act. That law gives new cities and towns an ability to buy federally owned land within the new town boundaries to be used for things like parks and public facilities.

Sometime in March, the town will hold a second public hearing on recommended Forest Service land that is necessary for the town, said Heron.

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