Angry Pleas For Rate Hike Relief

Residents vent fears, frustrations at corporation commission session

Hundreds of Rim Country residents turned out for a rare meeting in Payson by the Arizona Corporation Commission.


Hundreds of Rim Country residents turned out for a rare meeting in Payson by the Arizona Corporation Commission.


Hundreds of angry water customers jammed a rare Arizona Corporation Commission (ACC) meeting in Payson Friday to complain bitterly about steep proposed increases in the water rates for eight Rim Country communities served by Payson Water Com­pany (PWC), formerly owned by Brooke Utilities.

Residents of Gisela and Deer Creek dominated the testimony, pleading with the three ACC commissioners to reject a company request for a 138 percent increase in average bills.

The rate plan would charge a base rate of $23 a month. People would then pay $4 per 1,000 gallons up to 3,000 gallons, $7.66 per/thousand for the next 7,000 gallons and then $9.62/1,000 gallons for anything above 10,000 gallons per month.

Monthly use averages about 3,000 for the whole system, but varies wildly from one community to the next. Mead’s Ranch residents average 851 gallons a month while Gisela residents average 6,874 gallons a month.


Former Star Valley mayor Bill Rappaport joined hundreds at a hearing before members of the Arizona Corporation Commission.


Arizona Corporation Commission Chairman Bob Stump

Gisela and Deer Creek residents mostly complained about that tiered rate structure. Residents of Mesa del Caballo, East Verde Estates, Geronimo Estates and other communities had different complaints.

Mesa del Caballo residents worried about those big increases on top of hefty charges to hook up to Payson’s Blue Ridge pipeline.

Other communities like East Verde Estates worried about the additional imposition of water hauling charges when supplies run low in the summer, which could triple their bills.

Throughout the emotional hearing, residents said they felt ripped off by former Payson Water Company owner Robert Hardcastle and don’t trust the figures provided by the new owner, J.J. Williamson.

Williamson has asked for the rate increase to provide a revenue increase of about $400,000, which the ACC staff recommended cutting to $290,000. The company hasn’t had a rate increase since 2000 and Williamson maintains he’s operating at a loss. He says he needs to increase average bills by between 50 and 138 percent depending on the community just to operate at the roughly 10 percent return on investment

Again and again, those testifying expressed outrage over the size of the increase and distrust of the figures the company has submitted.

Former Star Valley mayor Bill Rappaport said as soon as Star Valley bought its water system from Brooke Utilities for $720,000, the long-neglected system began falling apart — forcing the town to invest another $300,000.

“This company has been out of compliance for years and the commission has done zip about it. I sure as hell wouldn’t depend on the ACC staff to make the decision. You’re the elected officials. You’re the ones who bear responsibility.” Then he turned dramatically to the audience and declared, “I’m behind you on this. And I’ll give you my all on it I promise you.

Royce O’Donnell joked, “I was wondering who brought the rope — in your case the ropes,” he said to the three commissioners facing the nearly unanimous opposition to the rate increases largely supported by the ACC staff.

He noted that he once owned the water company in Deer Creek and had to sell it when the ACC insisted he make improvements. But after Brooke Utilities bought out the company, owner Robert Hardcastle made none of the required improvements before selling the company after 15 years to Williamson, now stuck with an even more run-down system.”

Mary Hanson, who owns one of the most productive wells in Mesa del Caballo, said the output of her well has fallen from 14 gallons a minute to about 10 gallons a minute. Her testimony actually supported Williamson’s claim that the well levels fall drastically as soon as the warm weather hits. Hanson said a handful of high use homeowners — some with their own wells — have drained the water table. “If we can’t do something and I drop below 7 gallons a minute, I will have to pull my well offline.”

The ACC has already approved a roughly $7 monthly surcharge for the 400 or so homeowners in Mesa del Caballo, which will pay the roughly $300,000 cost of a pipeline to connect the unincorporated community’s water system to Payson’s. Eventually, homeowners there will likely have to pay an additional $30 per month or more to connect to the Blue Ridge pipeline. In addition, if the ACC approves the requested rate hike the average water user will pay 61 percent more for the average 3,000 gallons a month. The average bill will rise from $21.75 to $34.92, not counting the surcharges for the Blue Ridge hookup.

Mesa del resident Randy Norman provided the only other even generalized support for a water rate increase, which will end the community’s chronic water shortages and expensive water hauling charges. “We’re on stage four (water conservation). The wells cannot keep up with demand. We need to get this rate increase resolved or I may not be able to get water out of my faucet.”

An administrative law judge heard days of previous testimony and is expected to rule on the requested rate increase in the next three weeks. The ACC will then decide whether to act on that recommendation — probably within 30 days of the administrative law judge’s findings.

Ed Eckhardt lives in East Verde Estates which faces a 57 percent increase in average water bills. The average users there consumes 2,100 gallons a month. ACC staffers at the hearing said the company has dropped a controversial request to also impose water hauling charges in times of shortages, which could double or triple bills. The Roundup could not confirm that information prior to press time.

Eckhardt said the company’s rate filing is full of contradictions and missing information. “I’m disappointed that many of our problems are caused by system failures and not a shortage of water,” he said.

Jim Dunne, from Geronimo Estates, said he’s been fighting for nine years to hold the water company accountable. “They’re always weaseling out of something. Even after all our fighting, they simply ignored your order to install a second 10,000-gallon storage tank. I just hope that the new owners will do the right thing for everybody by providing adequate water service in the monopoly they own.”

The majority of people who testified in the three-hour long hearing lived in Gisela and objected passionately to a proposal to first raise the minimum base rate sharply and then shift to a tiered water rate structure that charges heavy users much more per gallon. The tiered system encourages water conservation, but many Gisela residents who spoke said that the area alongside Tonto Creek has plenty of water and shallow, reliable wells.

The ACC figures show that the average Gisela user consumes nearly 7,000 gallons monthly and would face a 138 percent increase to about $64 a month. The average Deer Creek resident uses $4,400 gallons and would face an 84 percent increase to $45 a month.

Teresa Gonsalves said her husband is on disability and they can’t afford the proposed rates. “We have a limited income. This is very unfair and not necessary. We have a big water supply. We have evidence we’re being ripped off. Numbers don’t lie.”

Sandra Crane, from Gisela, said she uses 14,000 gallons a month in the summer to keep her garden alive. Under the proposed rate increase, her monthly bill would go from $50 or so to about $300 a month. “

Judy O’Connell, of Deer Creek, said the company’s filings were full of gaps and misleading numbers. “We residents of eight small communities are being asked to pony up an enormous increase in water rates by a company that cannot provide any evidence as to the necessity. Anyone can make a company look unprofitable by transferring expenses to a management company they own. We want an independent audit.”

Dee Chiccino, of Gisela, said, “this increase is not just or reasonable. Many residents are already struggling — such a drastic increase will cause a lot of harm to our families and our community — not to mention to all the dead trees.”

She then had her three children sing an enthusiastically rendered water rate hike protest song — to the delight of the audience — and the commissioners.

Pat Tatum, of Gisela, said, “You’re telling us that we’re going to be penalized for continuing our traditional way of life. We have 532 people in 288 households on 650 acres surrounded by public lands so we can never expand. What right does this commission have to tell us we can’t have an orchard when the Valley has 4 million people living in a desert with lawns, swimming pools and no water conservation at all — using water that comes off our watershed?”

Emmie Derise said residents shouldn’t have to pay high rates for terrible service. She said she repeatedly loses water pressure due to failures of the system. “It draws all the water out of the house — including your hot water heater. When the service comes back on, it whooshes in and brings all kinds of dirt and debris with it. The time for lies is over. It was a mistake and it has been an ongoing mistake to entrust water resources to a private, secretive company run by people with no ethics or conscience. They should be prosecuted, punished and made to pay restitution.”

Judy Kemp said, “I thought this was such an outrageous increase they would never get it. I have never been more wrong. Water company customers have nowhere else to go. If in my business our price went up 200 percent, we’d lose all our customers. This is just shameful.”


Mel Mevis 2 years, 9 months ago

A 10% return on investment? We don't live in the 1990's anymore. Last time I looked banks were only giving between 0.8% and 0.2% interest on savings. So, we subsidize another business?

Maybe it's time for a public water district here in rim country. Private industry just can't seem to run at a profit.


Meria Heller 2 years, 9 months ago

7,000 to 14,000 a month? What? People who use more, should pay more. Conservation is a dirty word but....


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