Pine Strawberry Water Board Candidates Answer Questions

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Andy Towle/Roundup - atowle@payson.com

Richard Dickinson

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Andy Towle/Roundup - atowle@payson.com

Sam Schwalm

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Andy Towle/Roundup - atowle@payson.com

Tom Weeks

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Andy Towle/Roundup - atowle@payson.com

Terry Schleizer

Whoever wins the election for open seats on the Pine Strawberry Water Improvement District Board will have to decide whether to continue efforts to purchase two water companies, where to drill new wells and when to lift a building moratorium.

The four current board members, whose terms expire in December, all want to stay on and make those decisions, including Terry Schleizer, Don Smith, Tom Weeks and Richard Dickinson.

But so does challenger Sam Schwalm, a frequent critic who maintains a Web site devoted to the water problems in the two towns.

All five of the candidates for the four seats agreed to a question and answer session with the Payson Roundup. Their answers follow.

From outward appearances, the current board is a close knit group united in its efforts to wrest control of the Pine and Strawberry water companies away from Brooke Utilities and its frequently criticized president Robert Hardcastle.

Schalm, on the other hand, opposes PSWID’s proposed purchase of the two water companies, saying it most certainly would raise water rates.

Schwalm’s election to the board could throw a monkey wrench into the overall consensus that the current board operates under.

Schwalm, who devotes a good deal of time and effort to researching water problems, volunteered last spring to serve on the board after former member Barbara Hall resigned.

The board, however, passed over Schwalm in favor of Weeks, a Pine businessman.

Of the current members, Ron Calderon, Michael Greer, Schleizer and Dickinson won their seats in a fiercely contested recall election held last March.

Also on the board is chairman William Haney, whose term expires in 2010.

These are candidates’ answers to our questions.

1. Is the district’s purchase of the Pine and Strawberry water companies in the best interests of the two towns’ water users? Why or why not?

Dickinson — The results of the recall election in March clearly indicate that the majority of residents want to control their own water future.

For the last several years, the water supply and the quality of service have depended on the ability of the ACC (Arizona Corporation Commission) to influence change from a recalcitrant utility company.

The people have had enough. By owning the water utilities, the revenues generated by water rates will stay in Pine and Strawberry and be used to improve the infrastructure of the water system rather than go to profits for businessmen in California.

In addition, well owners in Pine who control substantial water supplies have committed to sharing water with the communities once the acquisition is final. Acquisition of the water systems will ultimately result in access to additional water supplies, an upgraded water system and improved quality of service.

Smith — I believe that the acquisition of the water companies will provide for a locally controlled, constant water supply. This will relieve many of the present complaints of water users in Pine and Strawberry.

Schwalm — Based on the analysis that I have done, purchasing the water companies is likely to result in a rate increase of 50 percent or more. I see this as a bad deal for Strawberry because as a single water district, Strawberry will be tied to the water problems in Pine and will pay a significant portion of the costs for the resolution of Pine’s water problems.

For Pine, the answer is less clear.

Resolution of the water problems is vital for Pine, but has to be done within what the community can afford. Purchasing the water companies is by far the most expensive solution. Completing the K2 project is much less expensive and only the rate payers in Pine would bear the cost.

Another alternative that needs to be evaluated is to purchase/condemn the Milk Ranch well and have the district sell the water to Pine Water Company.

Weeks — Yes. We need a safe and plentiful water supply year-round.

Schleizer — I believe that it is in the best interest of the residents of Pine and Strawberry to have control of their water. I think the voters spoke loud and clear in the recall election and have continued to do so by attending our many meetings in the past seven months to let us know that they still want to own the assets of the water companies.

2. Will the district ever need to drill the K2 well?

Dickinson — It’s been suggested that drilling the K2 will provide ‘insurance’ against failure provided the PSWID fails to acquire the water companies. What ‘crystal ball’ are we gazing into here? People talk as if it were a ‘given’ that drilling the K2 will be successful. It may or may not produce the water we hope for. There are no guarantees. The K2 has potential.

However, the project is currently behind schedule, and still is mired in controversy.

Smith — No. There are much more available and hydrologically sound sites in Pine. The drilling of a deep well should be considered in Pine Creek Canyon.

Schwalm — Yes. The district will need a second deep well in the future and the economics of drilling at the K2 site are just too compelling to ignore. The K2 site saves substantial sums of money because the land is already owned by the water company and connection to the water system is essentially cost free. The K2 well also has significant operational flexibility as water can be easily delivered to either Pine or Strawberry.

Weeks — Ever is a long time. I think it might be a valuable asset in the future.

Schleizer — At this point, there has been so much controversy over the K2 agreement, the well’s location, its ability to produce, the cost, the access to the site and on and on, that it is difficult to believe it would ever have a positive impact on our water situation. I do know that other wells are available, are already producing and were drilled without the benefit of taxpayer dollars that would have a positive impact on our water situation.

3. Does Star Valley’s decision to drop its bid to buy out Hardcastle based on cost, worry you?

Dickinson — Of course the PSWID board is concerned about the potential cost of the acquisition. We have developed a team of experts to address the acquisition process and hopefully minimize the associated legal expenses. An appraisal firm as well as an investment banking firm, each experienced in local water issues, have been hired. But what is the cost of maintaining status quo?

It’s taken years for the ACC to convince the current utility to drill new wells, let alone proactively upgrade the infrastructure.

I guess the real question is what price do we put on ‘quality of life’ and our water future in Pine and Strawberry? “Good faith” negotiations based on fair market price that avoid condemnation would be a “win-win” for the utility company and the residents of Pine and Strawberry alike.

Smith — No. The present PSWID board has done an outstanding job of researching the purchasing process. The board has both financial and operational requirements to run the companies, potentially, available.

Schwalm — I have been worried from the start about the financial risk to the community of taking immediate possession of the water companies. This is like writing a blank check because the final price will be decided later by a jury. Another worry is that the board made offers to Brooke without knowing the overall cost to set up the district and the impact to rate payers. This indicates that the board is not concerned about what price will be paid. Star Valley had the foresight to know that the price was going to be too high for their community. I’m not sure that we are going to be as lucky.

Weeks — Not at all! They have a completely different situation with their system and supply.

Schleizer — I think the cost issue, while the main issue for Star Valley, was not the only issue. Speaking from our experience, it gets a little tiresome to have every effort the board makes to move forward with the process to acquire the assets thwarted, sidetracked, blocked, delayed and manipulated to cause further delay. Again, the residents of Pine and Strawberry have clearly let us know that they want control of their water future. We are making progress. Progress would be swifter and less costly if there was cooperation by the utility.

4. Should the district seek water from the Blue Ridge pipeline?

Dickinson — It’s apparent that building a pipeline to deliver Blue Ridge water to Pine and Strawberry is not cost effective. However, I understand, that the county will negotiate at no charge for the legitimate water rights of each domestic water district in the county. I believe we should explore this opportunity to see if it might result in our ability to barter for new water supplies.

Smith — No. As both the present and past boards evaluated this potential water source, we found the initial cost and long-term maintenance of the pipeline would cost much more than we could afford.

Schwalm — No. Several years ago the PSWID board did a cost study for the Blue Ridge pipeline. The cost came out to about $17 million for the pipeline and a water treatment facility. Pine/Strawberry would be so far down the allocation list that it is likely that during periods of drought there would be no water available.

Weeks —Not at the present time. The hydrology reports show an abundant water supply in the Pine area.

Schleizer — Our supplemental water committee looked at that option. Their recommendation was the transportation was too costly to justify the effort. Especially after years of being told that there was no water in Pine which we now know was not true. The cost would not be justified to transport from the Blue Ridge pipeline.

5. Will lifting the moratorium lead to real estate speculation?

Dickinson — Growth is unavoidable. Planned or controlled growth is the goal. We can’t outgrow our water supply. The PSWID board will implement a plan to manage the allocation of new meters with an eye on water resources and total potential build-out over time.

Smith — In our present real estate climate, I would say no. The actual answer to this question depends upon the national and local economies. If the ability to borrow to buy real estate remains as it is now, we will see no significant increase in real estate speculation.

Schwalm — One of the goals of both the K2 project and the purchasing of the water companies is to provide a sufficient water supply in order to lift the moratorium in Pine. That will allow construction in Pine to increase and bring more prosperity to the area. Along with that prosperity will come more people and the community needs to be sure that we don’t build ourselves back into the same problem. One of the concerns with the approach of purchasing the water companies is that oversight of water availability for new construction will move from the ACC to Gila County. Gila County’s rules are much more lax and we run the risk of overbuilding our water supply, yet again.

Weeks — No. I don’t think we have enough property in the communities to have speculators make a big impact.

Schleizer — The term ‘speculation’ irritates me. Is it speculation for the couple in Kingman to work hard all their lives, buy a lot in Pine in order to build a retirement home, and still be waiting after two and half years to get a water meter so they can build their home?

Or is it speculation for the folks who have already built a home, hoping the ACC would force Brookes Utilities to ‘solve’ the water problem in Pine and are on the water meter waiting list, while they haul water to their property because they still can’t get a water meter?

I’m sure there will be people who will ‘profit’ when the moratorium is finally lifted. In all real estate markets there should be a profit.

How long have these so-called ‘speculators’ had to hold onto their land and wait? And who are they? There are rumors and innuendos of this large group of speculators that are going to ruin Pine with their building. I've never seen a list or even any names.

Not long ago in Strawberry, a new subdivision was put in. I think it required 32 new hookups and new lines run.

Several months later, water was being hauled to Strawberry because the community was out of water. I don't recall this ‘speculator’ being bad-mouthed for his or her entrepreneurship.

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