Star Valley officials will continue negotiations for the Payson Water Company in Star Valley Wednesday, a week after buying three wells from Payson.
Town Attorney Tim Grier and Councilor Vern Leis will meet with Brooke Utilities President Robert Hardcastle in hopes of striking a deal for the water company. If one is worked out, Star Valley would finally have rights to distribute water to residents, possibly from the wells it bought from Payson.
As a “water purveyor,” Star Valley could also put in for a share of the 500 acre-feet of Blue Ridge water reserved for northern Gila County communities, although the council is still divided if it should, due to cost concerns.
Three wells purchased Sept. 20
In August, the Payson council signed an intergovernmental agreement selling the wells after Payson Mayor Kenny Evans met with the Star Valley Town Council in a closed-door executive session.
Under the modified terms of the sale, Star Valley purchased three drinking quality water wells for $82,000. In addition, Payson agreed to provide Star Valley with a backup water supply in emergencies by connecting the Tower Well to the Star Valley water system currently owned by Brooke. Payson agreed to supply the water regardless of who owns the water company.
On Sept. 20, Grier announced to council that escrow had closed.
The wells and accompanying agreement with Payson are a huge win for Star Valley which has struggled to secure water resources for residents after backing away from a condemnation sale of the water company several years ago.
But the well deal has a few holes.
Two of the wells are landlocked by Chris Benjamin’s property, which poses a major problem if the town ever wants to use the wells because Benjamin has indicated he will not allow access. Benjamin maintains the combined impact of the Tower Well and the three new wells would make his well worthless and so reduce the value of his property.
The town can resort to condemnation to force the sale of an easement at a price set by a judge, but many Star Valley councilors have expressed opposition to such an idea.
In addition, Star Valley cannot distribute water from any of the wells without water rights, which Brooke Utilities maintains.
Regardless, Grier said the real value of the well sale lies in Payson’s agreement to supply Star Valley with water in an emergency.
Payson would charge Star Valley or Brooke, depending on who owns the water rights, for the water, although it would not charge for the hook up.
“I saw the real value in the three wells is the backup water supply,” Grier said.
If the town can strike a deal with Hardcastle for the water company, it would remove the biggest obstacle in delivering water to residents.
With ownership of the water system, Star Valley would have the rights to deliver water to residents. This could come from the current system, the new wells or Blue Ridge.
Grier and Leis have been working with Hardcastle since he signaled a willingness to sell the 300-meter water system to Star Valley several months ago.
The news came as a surprise to Leis who said the town did not have buying the water company on its radar screen.
Several years ago, the town pursued condemnation to acquire the water system, but backed out at the last minute when it realized the cost of the system could be too high.
Although a judge never set a value for the system, Grier felt it was unwise for the town to continue when it did not know how high the price could go.
“That is what worried me, the price being unpredictable,” he said. “My big fear is the judge sets the worth and that would have been the price.”
Although the town backed out, Hardcastle had no hard feelings, Grier said.
When Hardcastle approached the town recently, “it was a surprise to all of us,” Grier said. “We didn’t have it on the table because it was not on our radar screen.”
If Star Valley can buy the system for the right price, it would be the turning point for the town, he added.
With the water treatment plant and 300 hookups, owning Payson Water Company would give Star Valley Certificates of Convenience and Necessity (CC&N). A CC&N gives the water company the right to serve customers in a set area.
Without the CC&N, Star Valley cannot do anything relating to water distribution.
“It doesn’t make much sense to get water if you can’t turn on the faucet,” Grier said.
Only at the right price
But Grier doesn’t want to see the town pay too much for the system.
If they do, they would have to subsidize the cost by charging water customers more.
“They won’t be happy if their water rates skyrocket,” he said.
In addition, the town doesn’t know precisely what physical or financial condition the water company is in.
Regardless, the council has directed Grier to continue negotiations.
“I don’t know if we will come to a meeting of a minds on the price tag,” he said. “Things are positive at this point.”
The town has not shut the door on acquiring a share of the 500 acre-feet of Blue Ridge water reserved for northern Gila County communities other than Payson.
While some councilors, especially Gary Coon, have said it is too costly for the town to get a share, build a treatment facility and then distribute it to residents, others believe there could be a way.
Grier is researching the cost and feasibility of the town securing water rights from Blue Ridge. The town would pay for a certain amount of water and have access to it when it could use it.
In the meantime, the water would likely continue down to the Valley.
Blue Ridge water would assure that the town never runs out of water, however, there is some suggestion that the town already has enough groundwater.
Star Valley currently relies mostly on private wells. The problem lies in the septic systems that also litter the town.
If septic systems started to fail, groundwater pollution is a real danger.