Sabrosa rate increases approved
Cave Creek could purchase troubled water system
by Kathleen Stinson

NEW RIVER – The Arizona Corporation Commission last week made permanent Sabrosa Water Company’s emergency rate increase, approved in 2005, and raised some service charges.

However, the increase does not include any costs for an arsenic removal plan, required by the state to be implemented by the end of the year.

Global Water Resources filed the application for a permanent rate increase in May 2006 while serving as Sabrosa’s interim manager. In April of this year, the Town of Cave Creek took over management of the troubled utility pursuant to negotiations that led to Global selling Cave Creek Water Co. to the town.

At the commission’s open meeting May 8, Commissioner Kristin Mayes asked Cave Creek’s counsel, Marvin Cohen, if the town had any intention of purchasing Sabrosa Water Co. Cohen told the  commissioners a new Arizona statute now allows the transfer of ownership of such a company.

“That (purchasing Sabrosa) is one thing we will look at ... we would work with (commission) staff,” Cohen said.

Since Sabrosa’s owner, Keith Morris, disappeared in 2000 after the onset of substantial service problems, selling the company has been problematic, forcing the commission to appoint interim managers.

In February 2005, the commission asked Global to assume management and operation of the system. In order to rehabilitate Sabrosa, the company filed for an emergency rate increase–which the commission granted.

“The problems that initiated and supported the application of interim emergency rate relief remain at Sabrosa: Inadequate water supplies, marginal to poor water quality, infrastructure that is aging and failing, and a series of financial and legal problems as a result of ownership abandonment,” states the May 2006 rate application.

According to Paul Walker, spokesman for Global, the company lost $112,500 in working to improve wells and infrastructure, modernize equipment and stop water outages from occurring.

“Global never asked for that money back from the Arizona Corporation Commission–we believe that it was simply the right thing to do–and left the system better than we found it,” Walker told The Desert Advocate.

Mayes said at the May 8 meeting that the commission appreciated what Global had done as interim manager.

One problem Sabrosa continues to have is high levels of arsenic.

Sabrosa, under Global’s management, did not submit an arsenic removal plan with its permanent rate application.

“Global has indicated to staff that the costs to customers to treat for arsenic will be high and has taken no action on this problem because it is only an interim manager,” as stated in commission documents.

Cohen also noted before the commission that the town may at any time give 30 days notice to be released from the manager duty, although Town Manager Usama Abujbarah has said

Cave Creek does not intend to terminate the agreement “anytime soon.”

Last week’s decision results in the average monthly water bill remaining at $89.13 and the median monthly bill at $67.17.

The commission also approved an increase in service charges to include: the establishment of service fee from $15 to $25, a meter test from $25 to $50, and delinquent reconnection from $25 to $30.