Cottonwood AZ (June 30, 2014) – When Cottonwood raised its water rates by 67% Verde Valley resident Alex Gozdan formed a group called Citizens for Fiscal Accountability and got 400 Verde Valley citizens to sign petitions.Among the lawmakers slated to receive the petitions are Senator Chester Crandell, Arizona Representative Bob Thorpe, and Arizona Representative Brenda Barton.
Alex sent letters over the past year and a half to Yavapai County Supervisor Chip Davis informing him about the rate hikes. Both Davis and Alex sent letters and emails to Crandell, Barton and Thorpe without ever receiving the courtesy of a response. Finally, Alex decided to get the legislators’ attention by creating a coalition of citizens and gathered signatures on petitions for presentation to the Legislators and delivering these petitions in person thus bringing to their attention their constituents’ concerns. As luck would have it Barton, Thorpe and Crandell held a town Hall meeting in Sedona on Wednesday June 25, 2014. Following Representative Barton’s presentation at the town hall in which she described how expeditiously citizen needs were being addressed by her staff, Gozdan presented his 400 signatures to Senator Crandell and also petitions to Representatives Thorpe and Barton. Gozdan was assured by all three Lawmakers that this issue would be a top priority for resolution. Barton admitted she was aware of the communications and offered no reason for not responding.
The City of Cottonwood bought 4 water companies outside its city limits in 2004 to augment the city’s under capacity water needs. Then they raised the water rates by 67% to existing customers of the newly purchased water companies outside the city limits in order to pay for sending their water to Cottonwood. “It’s more costly to operate equipment outside the city” said Cottonwood City Administrative Services manager.
“Getting water from outside the city is more costly due to additional pumps needed to boost water pressure.”
The question is this: Why should residents and existing customers from outside the city of Cottonwood pay for getting their (former private water company) water to the City of Cottonwood? The four private water companies that were purchased were older systems and in need of repairs and upgrades. Cottonwood bought these companies “as is” with full knowledge there was work to be done.
The Loophole: Arizona does not have the laws in place to regulate water rates served by municipal water utilities to inside and outside areas, to stop them from gouging the public with exorbitant rate hikes of more than 67 percent for their most precious resource, water. Now a group of more than 400 Verde Valley citizens are fighting back. Therefore Cottonwood now owns four 4 private water companies that are not regulated by the Arizona Corporation Commission (ACC). Municipal water companies are exempt from ACC jurisdiction. Water customers of these four private companies have no representation and are subject to the whims of, in this case, the City Council of the City of Cottonwood.
June 9, 2009 Davis to Corporations Commission
November 16, 2010 Davis to Bartosh, Page 1, Page 2
January 11, 2011 Davis to Bartosh, Page 1, Page 2
February 8, 2011 Davis to Representatives
November 12, 2013 Davis to Representatives
November 25, 2013 Gozdan to Davis
3 Comments
In a front page feature article in the Cottonwood Journal EXTRA/Larson News published Weds.Jul. 2, 2014 by Michael Rinker, Cottonwood Municipal Water utility’s budget projections through 2020 propose a 42.2% user rate increase from $5.8-8.3 million; including an additional est. 8% rate hike in 2014. Almost all of the Cottonwood Municipal Water utility’s rate increases are earmarked to pay back the millions of dollars in bond debt the city incurred when they bought 5 private water companies & the area’s only groundwater source in a buying spree – these rate hikes affect all the homeowners outside city limits the utility serves:11,685 people who live in the Verde Village + 3,335 in Cornville + more than 3,300 in Bridgeport; all of whom have no representation. Should the 8% rate hike be imposed Oct. 1st, 2014, the total rate increases for the outside customers will total 67% + 8% = 75% increase in the cost of drinking water in a 12 mo. period. The city of Cottonwood only has 11,285 residents who can vote.
Has Arizona gone too far in letting municipal water utilities buy an unlimited number of private water companies and groundwater sources outside city limits with millions of dollars in revenue bonds, retain immunity from regulators in setting rates for citizens without a voice, and by empowering these monopolies to price-gouge outside customers with little money by tripling water rates to quickly recoup their inprudent investments?
Beginning in 2005, the City of Cottonwood aggressively began acquisition of five private water companies through a municipal bond revenue program — the Clemenceau Water Company, Cordes Lakes Water Company (Cottonwood Systems), Cottonwood Water Works, the Verde Santa Fe Water Company, and another water company in the Quail Canyon development that costs the city more than $1 million alone. The city’s purchases for water companies in 2004 and 2006 came from borrowed money in the total amount of $37,545,000 ($13,580,000 for Cordes Lakes, Verde Santa Fe, and Clemenceau Water Systems; $16,580,000 for the Cottonwood portion of the Cottonwood Water Works System; and $7,385,000 was loaned to the city of Clarkdale to purchase their portion of the Cottonwood Water Works System). The city also borrowed a significant sum of money to repair, maintain and upgrade the purchased water companies’ infrastructure, fueling the city’s debt.
No surprise about the lack of response from Barton, Crandell and Thorpe. I don’t know who they think are but I have had a similar experience with all three of them. I am active in the anti-“smart” meter movement and have sent them a great deal of material over the years.
Crandell — He has NEVER responded to ANYTHING I have written him.
Barton — I had a phone conversation with Barton about a crucial ACC/”smart” meter related issue in which she promised to find out the answer and get back to me. She never did. Despite probably more than a dozen follow-up inquiries from me – by email, phone and even snail-mail over the course of at least a month – Barton never got back to me with the answer like she said she would. Then I found out her biggest donor is APS parent company Pinnacle West. I leave it to you to decide if there’s a connection.
Thorpe — Thorpe once rudely responded to something I had written him asking me not to send him stuff I had not written myself. He was obviously very weirdly confused since what I had sent him was clearly written by me — my letterhead, signed by me, etc. I sent him emails every other day for week trying to get resolution and he never responded. Finally I emailed all the other legislators asking if any of them had seen him since I had not heard from him and was worried about him. “Has anyone seen Bob Thorpe?”
From donations received from concerned citizens in Sedona and around the state, Barton, Crandell and Thorpe (along with all the other legislators) each received a free copy of the documentary DVD, Take Back Your Power. I never heard back from any of them.
So, Alex Gozdan, don’t feel singled out for not even getting the courtesy of a response from these people. It’s their M.O.
Thanks Warren,
And article in Cottonwood Journal concerning our petition delivery quotes a Cottonwood city official stating that the city had spoken to Senator Pierce about our legislative change effort and that Pierce had said some thing to the affect of “don’t worry about it I will take care of it! Hence legislation Crandell said he had proposed and turned over to Pierce was buried!! That comment pretty much let us know that Steve Pierce is the rural residents JUDAS. He apparently agreed to not follow through with legislation. And I am beginning to agree with you completely. By the way my wife set up the petition at Change .Org for the smart meter awareness folks as well. A new pole should scare the realtors. 1500 people were asked how antennas and towers would affect their decision to purchase property if towers and antennas were visible.
78% said they would look elsewhere to buy their homes so Real-state values are being impacted. It is all about the money is it not.
Have A Good Day!!