True Tale Of Two Water Companies

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What a contrast: Consider the tale of two water companies — One in Star Valley, the other a privately owned company serving small, unincorporated communities scattered across Rim Country.

Both of those water companies were owned by Brooke Utilities for more than a decade. Brooke kept water rates low, but failed to invest in vital infrastructure. The private company ran all its systems into the ground, letting the plumbing deteriorate and failing to develop an adequate water supply.

A couple of years ago, Star Valley bought out the portion of Payson Water Company that served maybe 10 percent of its residents.

Jason Williamson, a business owner, bought out the balance of Brooke Utilities holdings in Rim Country last year. The company serves Whispering Pines, Geronimo Estates, Deer Creek, Mead Ranch, Flowing Springs, Gisela/Tonto Creek Shores, East Verde Park Estates, and Mesa del Caballo.

So how did that all work out?

Star Valley bought the company for cash out of its ample and carefully hoarded reserves — leaving it debt free. Then the town sought and received a series of federal grants to make needed repairs. The town also took advantage of existing town staff to keep the cost of running the water company as low as possible.

The result: The town has steadily improved the infrastructure while keeping rates low. The purchase leaves the town with the core of a system that may ultimately serve the whole community.

Most residents of Star Valley rely on private wells for their drinking water, thanks to an ample supply in a water table that comes relatively close to the surface. So if the community ever faces problems with water contamination from the aging septic systems throughout town, Star Valley can expand its domestic water system. Hopefully, the town can one day also provide hydrants along the highway that will allow for needed commercial development.

Things haven’t gone nearly so smoothly for Williamson, struggling to convince the Arizona Corporation Commission to give his company a massive rate increase — likely somewhere between 75 and 118 percent. Williamson also wants permission to impose potentially steep water hauling charges in places like East Verde Estates. The filings submitted to the Corporation Commis­sion also hint at a big increase in things like water connection fees when people get cut off for not paying their bills or using too much water when rationing goes into effect.

Moreover, residents in Mesa del Caballo likely face an initial doubling of their water bills to cover the cost of hooking up to Payson’s Blue Ridge pipeline, which will eliminate the community’s debilitating water shortages at a hefty price. Apparently, residents will then have to also pay the big rate increase imposed on all the other communities as well.

The mountain of figures, reports, estimates, rationalizations and complaints already on file with the Corporation Commission have spawned understandable dismay and confusion among the company’s customers. Given Brooke Utilities’ long neglect of its systems and the undeniable problems in obtaining enough water in drought-plagued Rim Country, Williamson certainly needs a hefty rate increase. But many elements of the proposed rate structure remain troubling. Nonetheless, without a significant rate hike, Williamson can’t get the loans and grants he needs to maintain and hopefully upgrade the system.

So what’s the moral of the story?

Water remains so vital to growth and economic stability that it makes little sense for Rim Country communities to rely on private companies supervised by a mostly distant and neglectful Arizona Corporation Commission.

Ultimately, we hope communities like East Verde Estates, Mesa del Caballo, Whispering Pines and others will consider the benefits of seeking annexation to Payson, which now has ample water and a well-run water department. Each of those communities would bring with it a dowry of water rights to the Blue Ridge Reservoir, since Congress allocated 500 acre-feet annually from the pipeline for other communities in Northern Gila County besides Payson.

Granted, annexation would pose a host of thorny questions for both those small communities and Payson taxpayers. But we face regional problems that demand regional solutions — starting with providing a safe and secure water source.

In the meantime, we hope that residents will get involved — and become informed.

The long, sad history of Brooke Utilities’ neglect of the needs of the communities it once served underscores the consequences of not paying attention.

ACC HEARING ON RATE INCREASE:

Jan. 13, 10 a.m. at 1200 W. Washington St., Phoenix, Ariz.

Webcast: www.azcc.gov

To listen on the phone: Call 602-542-0222.

To make comments by phone call the ACC Hearing Division at 602-542-4250.

To view hearings online, go to at www.azcc.gov, click on the Live Meeting button and check the Public Meetings and Event page Hearing Archives from 2011 until 2014.

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