The Pine Strawberry Water Improvement District board has voted unanimously to accept a $1 option to purchase the Milk Ranch well.
The board took the action at a hastily called Nov. 9 special meeting.
Milk Ranch well co-owner Ray Pugel said the option will allow the district 180 days to evaluate and test the well located in a six-acre field about 100 yards south of the old Ponderosa Market in Pine.
If PSWID decides to exercise the option, Pugel anticipates principals in Milk Ranch LLC will begin negotiating a purchase price and terms with the board.
The option to purchase contract states the price will be based on an appraisal of the well, the property and easements to be conveyed.
The contract also contains an exclusion exclusion clause that says PSWID may not purchase Milk Ranch if ownership or any interest in the well is transferred to Brooke Utilities president Robert Hardcastle or any business he is affiliated with.
Pugel has long been at odds with Hardcastle and in July 2006 filed a complaint with the Arizona Corporation Commission to withdraw his land from Pine Water Company’s service area.
Hardcastle responded with motions to dispute Pugel and keep the well in PWC’s service area.
The Pine and Strawberry water companies, owned by Hardcastle and parent corporation BR, control the towns’ two current water systems with its CC&N.
The Certificate of Convenience and Necessity (CC&N), a type of regulated monopoly, is a state-issued permit that defines the territory and terms under which a utility can operate.
Because Pugel and well co-owner Robert Randall are restricted by the Pine Water Company’s service area, they cannot supply water to their other properties or to other residents in the two towns.
Since the Milk Ranch well began producing in the fall of 2006, residents have considered it a possible long-term water solution for the two communities.
Registered hydrologist Michael Ploughe, also the Town of Payson hydrologist, wrote in his evaluation of Milk Ranch, “the new well is a very capable well and is significant for the Pine area.”
He also recommended that the seven-day constant rate of pumping not exceed 150 gallons per minute but higher rates could be attained with further well development.
He estimates with some modifications, pumping rates of 300 to 500 gpm could be reached.
Most wells in the area produce 30 to 50 gpm and less than 10 produce more than 200 gpm.
Plough also says tests for pH levels, temperature, taste, odor and conductivity show it is of good quality.
“It’s a very good well,” Pugel said.
For years, Rim Country residents argued underground water did not exist in the area, but Pugel and Randall proved soothsayers wrong by drilling a 1,045-foot well into the lower aquifers.
Until then, most of the wells had been drilled into the shallow aquifers.
Also at the PSWID meeting, members voted to hire Harry Jones as a part time interim manger, and heard a report that chairman Bill Haney had met with Hardcastle to discuss the district’s purchase offer.
PSWID board members voted weeks ago to offer Brooke $2.55 million for the two water companies. But Hardcastle turned the bid down and no counter offer was made. If Hardcastle continues to refuse to sell, condemnation proceedings could begin.
Board members have been united since a successful recall election last spring that PSWID would wrestle control of the two water companies away from Hardcastle and Brooke Utilities.
After hearing that Hardcastle turned down the purchase offer, members instructed board attorney John Gliege to continue with the acquisition of Pine and Strawberry water companies whether it be by negotiated purchase or condemnation.