Star Valley may get into the water business after all.
The council in an Aug. 9 executive session will discuss an unexpected opportunity to buy the privately-owned Payson Water Company at a price it can afford.
Moreover, the council at that meeting could renew a sometimes contentious proposal to buy three wells from Payson for about $100,000 and strike a deal to get an allotment of water from the Blue Ridge pipeline.
Town Manager Tim Grier said the dramatic shift in the town’s complicated options took place during a recent meeting with Brooke Utilities President Bob Hardcastle, who asked town officials whether they still had an interest in buying the small water company that serves about 300 Star Valley residents. Hardcastle for the first time suggested a price tag for the system that would make it potentially affordable, said Grier.
“We’ve got something new on the table,” said Councilor Vern Leis at Tuesday night’s regular council meeting. “I think it’s an excellent idea.”
“I’m all for it,” added Councilor Barbara Hartwell.
Councilor Gary Coons said he hopes the town can eventually buy the Payson Water Company, but remained skeptical about buying three unused wells from Payson unless the deal included an easement to connect the wells to a water system.
“I’m really in favor of buying the Payson Water Company, but as far as buying the three wells from Payson, we have easement issues. As long as we have those issues, I don’t see a future in buying those wells.”
The council seemed eager to explore the possibilities. Grier said Payson Mayor Kenny Evans will attend the closed-door executive session next week to talk about an Intergovernmental Agreement (IGA) between the neighboring towns that would include a Payson pledge to limit pumping from the controversial Tower Well.
Grier declined to reveal the possible price tag for the water company.
In 2008, an appraiser hired by Star Valley put the value of the water company at $475,000. Hardcastle rejected an offer of about $550,000 and the town dropped its bid to buy or condemn the water company amidst uncertainties about the appraisal. Town officials in 2008 said Hardcastle wanted close to $900,000.
Grier indicated the town could pay in several ways, including using a portion of its carefully hoarded $1 million reserve fund, setting up an improvement district or seeking federal water infrastructure grants and loans.
Purchase of the water company could break a vexing impasse in Star Valley’s years of efforts to secure a long-term water supply and ensure that wells owned by neighboring Payson don’t pose a threat to Star Valley’s water table.
Payson acquired the Tower Well six years ago when its own water table was dropping fast and the council had imposed tough growth limits. Fears Payson would pump so much water out of that well that it would lower Star Valley’s shallow water table spurred the incorporation of Star Valley.
Political shifts and the Blue Ridge pipeline have transformed the once-bitter relations between the two towns on the topic of water. Payson expects to complete the Blue Ridge pipeline in 2014, which will double the town’s long-term water supply and provide plenty of water for a build-out population of about 40,000, even without using the Tower Well.
The federal law that authorized the Blue Ridge pipeline also set aside 500 acre-feet for other northern Gila County communities — including Star Valley. Few of the other eligible communities have made much progress in securing a water right, partly because only a “water purveyor” that can sell water to customers is eligible. Brooke Utilities is the only qualified “water purveyor” in Star Valley and has the exclusive right to sell water in the area granted by the Arizona Corporation Commission.
Star Valley’s purchase of the water company would give it the legal status to negotiate with the Salt River Project for a share of the Blue Ridge water, which Payson could deliver through the pipes that connect the Tower Well to Payson’s system.
Relations between the once-squabbling towns also took a turn toward partnership recently when Payson asked Star Valley to join in establishing a Separate Legal Entity that will control a proposed four-year college campus in Payson.
Payson also offered to sell Star Valley three wells and to accept a cap on how much water it can pump from the Tower Well. Studies show the so-far modest pumping from the Tower Well has apparently temporarily affected well levels in several nearby wells, but hasn’t had an overall impact on Star Valley’s water table.
The town’s water table remains close to the surface due to the area’s topography. Most residents rely on their own wells for water.
The limit on the Tower Well Payson has offered would allow it to pump much more water than it does now in a crisis, but much less than the amount studies suggest might affect Star Valley’s water table. In fact, Payson’s water engineers maintain that the Tower Well is so deep that it taps into a different, deeper water table and could never seriously affect Star Valley’s network of shallow wells.
As part of the deal, Payson has also offered to provide a backup water supply to Star Valley through the plumbing that connects the Tower Well to a large, water storage tank.
However, easement issues complicate Payson’s offer to sell Star Valley the three wells at cost. The small piece of property that includes the well site is surrounded by land owned by Chris Benjamin, who was a key player in incorporation and in the crusade against Payson pumping from Star Valley’s water table.
Benjamin has refused to offer or sell an easement so that the three Payson wells can be connected to a water system.
He argued that pumping from those three wells could lower the water levels in his well and affect the value of his property. He won in court when the original owner of the three wells sought to force him to provide that easement. He has since refused to allow Star Valley access unless the town buys his property.
Grier, who doubles as the town attorney, said he believes a public entity like Star Valley would have a much stronger legal position convincing a court to order Benjamin to sell or provide the town with the easement.
The complications of obtaining that easement will likely figure into the discussion next week about purchase of the Payson wells and acceptance of the IGA that will limit pumping from the Tower Well and provide a possible backup water supply for Star Valley.
Critics like Coon say it makes little sense for Star Valley to spend $100,000 to buy three wells it can’t use without the easement — and several council members have expressed deep reluctance to use the town’s powers of condemnation to force Benjamin to sell an easement at a price set by a court.
However, Grier said the purchase of the wells would provide substantial benefits and that the IGA with Payson would represent a big step away from confrontation and toward partnership.