District Sues For Control

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The Pine Strawberry Water Improvement District has filed an application for immediate possession in superior court that could lead to the takeover within two months of the Pine and Strawberry water companies — with the ultimate cost to be determined by a judge.

The civil action on March 25 added to the original condemnation lawsuit the board filed in November 2008 in Gila County Superior Court.

PSWID board president Bill Haney said the complaint was filed, “after receiving advice from our legal counsel and after careful analysis. (We) are proceeding in what we believe will be in the best financial and overall interest of the residents of the district.”

Arizona Revised Statutes require that the complaint now go to the Superior Court where a judge will decide whether PSWID has grounds for a takeover

If the court agrees, the PSWID board must post a bond in an amount determined by the court or agreed to by both the district and Brooke Utilities, the parent company of the Pine and Strawberry water companies.

If PSWID posts that bond, the board would take over control and operation of the two water companies.

Brooke Utilities spokesperson Myndi Brogdon said the immediate takeover would mark the onset of a civil litigation process, “to determine the final dollar amount PSWID would pay to Brooke Utilities for the assets of the two water companies.”

If Brooke and the PSWID board can agree on the final amount, which seems unlikely considering the history of bad blood between the two, a final purchase agreement could be reached in 60 to 90 days.

Compensation disputes are usually resolved within 9 to 18 months.

The purchase price has long been a bone of contention between Brooke president Bob Hardcastle and the PSWID board.

Last fall, the board offered Hardcastle $2.5 million, but he never responded to the offer. He said he would not negotiate on a purchase price because PSWID did not have the financial backing to make an offer.

“What difference does it make what an asset is worth if you don’t have the ability to buy it,” Hardcastle told the Roundup last fall.

But at a Feb. 10 PSWID board meeting, Haney told the audience, “We are in business” and that money for the buy-out, or condemnation, had been secured from Compass Bank.

However, Haney has refused to reveal the amount the bank has OK’d for the purchase.

The condemnation process is not unusual in the state. Scottsdale once considered taking over Arizona American’s system and Sedona may move to take over the Arizona Company, due to allegedly inadequate main lines, insufficient pressure in fire hydrants and concrete-asbestos in water lines. Also, several years ago Casa Grande unsuccessfully tried to take over the Arizona Water Company.

Star Valley at one point tried to condemn Brooke Utilities, but suspended the attempt when it got an updated cost estimate.

The forced takeover of the Pine and Strawberry water companies began last spring with the recall of four board members.

Critics of Brooke Utilities have long claimed Hardcastle has refused to reinvest in the two water companies and the infrastructure is in disrepair. Water users have also expressed outrage about alleged lack of service and summer water hauling charges.

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