Wells and patience tapped out in Desert Hills
by Jennifer Krahe

DESERT HILLS – Many residents served by Desert Hills Water Company have been without adequate water pressure, and sometimes completely without water, for some time.

The hardest‑hit by the water dearth are those living in the vicinity of 16th Street to 24th Street between Cloud and Joy Ranch roads, an unincorporated area north of Carefree Highway.

“The water was off again this morning from about 6:35 until 9:55. When I say ‘off,’ I mean totally off, not a trickle,” Michael Gilson, a resident of the affected area, reported on Friday morning. Gilson referred to the lack of water as an “ongoing problem.”

“Inititally I didn’t start documenting it, but it got so bad we called the Arizona Corporation Commission. These people with Desert Hills Water are very difficult,” he added. “Very prickly people.”

The inability of Desert Hills Water Co. (DHW), 34647 N. 10th Street, to provide some customers with adequate water from its wells is a situation known for some time by the Arizona Corporation Commission (ACC), the state agency charged with overseeing the private sector of water providers.

“Our staff has encouraged DHW to explore all alternatives (to provide water),” stated Heather Murphy, public information officer for the commission. “This is not something that our staff has been encouraging only lately–it’s been going on for some time.”

Brian McNeil, executive director of the ACC, related that “everything was great for the five years previous” but the past 12 months have been uncharacteristic of the company’s prior management and operation. He also mentioned commission staff speculation about internal problems, possibly health issues, within the company.

Although Cave Creek Water Company (CCWC) and Desert Hills Water Company previously had an agreement to provide water to each other in shortage situations, that agreement expired last year.

“Many years ago, probably decades, a pipeline was built between the two companies to serve as a redundancy mechanism,” Murphy reported. The pipeline would provide water when one or the other company couldn’t accommodate its customers.

“There are a lot of things that should have been done and we have been talking with the company intensively for the last year about the need to address the supply issue, and yet they continued to depend on Cave Creek Water Company,” Murphy said. “She (Mary Beth Rowland, DHW owner) has the obligation to serve, and if we have to get unfriendly about it, well, we have to get unfriendly about it.”

Pam Massett, another Desert Hills resident, expressed her concern by saying, “I signed up a month ago for another year with them–and it didn’t say anything about a shortage. I just hope they’re not taking the money and running.” 

ACC was out at the property on Friday. Although owner Mary Beth Roland was not present, her husband Larry gave commission engineers a tour.

“There is some fear that the situation might get worse before it gets better,” Murphy said. “There just isn’t enough water to meet the demand.” According to the ACC, there are two 100,000‑gallon tanks and one 300,000‑gallon tank connected to the DHW system. There is also one 250,000‑gallon tank not yet connected.

Desert Hills Water, as a privately held company, is subject to state regulations, whereas water providers within incorporated cities and towns in Maricopa County are governed by municipal rules. “It makes a difference in terms of the regulatory setup,” Murphy explained.

In order to serve a specific area, a water company must obtain a Certificate of Convenience and Necessity (CC&N). CC&Ns are the documents that allow private companies to become a public utility–to service customers and bill them. Cave Creek Water is also a privately held company.

Desert Hills Water and Cave Creek Water both have separate geographic areas to which they are obligated to provide water. “The obligation to serve rests with the holder of the CC&N,” Murphy said. “In other words, Desert Hills is accountable to its customers and Cave Creek is accountable to its customers, but they are not accountable to each other’s.”

As the companies’ service areas have grown, so has the need for water, and Cave Creek Water Co. has in the past assured the commission that they are making water available to DHW as often as they can without jeopardizing their own customers. As of Tuesday afternoon, CCWC could not be reached for comment.

“Once the company agrees to be a regulated utility and to get a certificate, they have monopoly rights,” McNeil related. “The other side of that is regulated rates and services requirements.” He added that if a service territory includes an undeveloped area and someone wants to develop it, costs are incurred by both the developer and the water provider. “If you (DHW) keep taking on folks, you have an obligation to keep working on supply issues,” stated McNeil.

He continued, “If a company can’t take on any more homes, they need to come down here and tell us. But there has to be a level of proactivity. I’m not saying Desert Hills Water is guilty as charged. I’m saying there is evidence that suggests problems with DHW operations and management.”

Further complicating the situation is the fact that Cave Creek Water Co. has a treatment plant for which it is responsible and must make sure its water pressure is strong enough to avoid any contamination caused by a backflow of untreated water. That means servicing solely its own clients in order to ensure adequate water pressure to the treatment plant–although in the past, according to Murphy, Desert Hills Water has drawn thousands of gallons from Cave Creek Water. “DHW still has the tie‑in to CCWC,” McNeil reported.

Tuesday morning, however, McNeil was made aware of a DHW line going to Arizona American, one of Anthem’s water providers. “That water is not turned on yet,” he reported.

According to McNeil, DHW’s Roland did not make anyone at the Corporation Commission aware of the Anthem connection. The ACC found out only “accidentally,” McNeil stated. “This is something that was being done between Arizona American and Desert Hills Water. Desert Hills Water didn’t let us know,” he related. Although this tie‑in idea came up before, McNeil said, it was resisted by DHW. Considered a short‑term fix, the ACC feels 500 gallons per second would be enough to take care of the current problem and that amount would not affect water pressure in Anthem.

According to ACC engineers, there are two ways to solve a water supply problem: storage and more wells. John Koleman, program manager for the Drinking Water and Solid Waste Program of Arizona Environmental Services, said, “It isn’t a question of the wells not producing properly; its more supply and demand. Murphy echoed his sentiment: “The root cause is not enough well capacity.” Koleman posed the question as to why no one was told previously that DHW was experiencing such a dearth of water and why, if DHW knew, they didn’t do anything about it.

DHW did try to drill another well recently, although it was unsuccessful. “I am understanding from talking to ACC staff that the company went short on the research and they drilled and came up with nothing,” said McNeil. “That is a problem. If they attempted to drop a new well, what did they do to ensure success?”

At the same time, however, bulk water sales were apparejntly occurring at Desert Hills Water.

“They were selling bulk water 6‑8 months ago,” said Pam Massett. “Why were they selling bulk water back then if they were short on water?”              

Mega Water Company, a delivery business that previously hauled water obtained from DHW, has recently been getting its water from hydrant fills in Anthem, Tramonto and Rio Verde. “Desert Hills Water has been referring customers to us,” said Nancy Huff, owner of Mega Water. “We want to let DHW customers know that we are here for them.”

Michael Gilson is plainly unhappy. “My wife had to wash her hair under a bottle of water last night. And you don’t get to flush toilets,” he complained. Other residents report they have had to take water out of a toilet tank or from their motor homes for some non‑potable uses. “Not only do we not get water, but if I don’t use any, there’s still a flat service fee (to DHW),” Gilson said.

Ed Barrett angrily echoed Gilson’s concerns, adding that people in his area pay three times what municipal customers pay for water.              

When asked if the county supervisors could do anything to aid Desert Hills water customers, Jim Bloom, District 3 Supervisor Andy Kunasek’s administrative assistant, said that a moratorium on water can only be imposed by the Arizona Corporation Commission. As for a building moratorium, Bloom admitted, “We don’t have that ability. You don’t need water to build. They (homebuilders) don’t even have to have water. They can truck it in.” 

“It’s just an untenable situation,” Gilson said of DHW. “If things don’t change, I’m going to go around and put bulletins on people’s mailboxes.”

But Gilson hasn’t had to to post anything yet. Customers reported to The Desert Advocate receiving in their mailboxes an urgent legal document detailing a curtailment tariff from Desert Hills Water Company. It ordered a “stage four curtailment” of water usage, prohibiting many activities including irrigation and washing vehicles. Residents were struck by how quickly they were forced into a Stage 4 curtailment. Although DHW recently told customers the company would be sending out an update on the present difficulties, there was no indication of the gravity of the situation until the notices arrived in mailboxes Saturday, stamped “Urgent.”    

“Obviously we’ve had a water outage,” Rowland said Tuesday. “It’s a combination of three things: the drought, we drilled a well that did not come through for us, and our emergency interconnect with Cave Creek Water Company–I assume they are having difficulties of their own.” She went on to admit that DHW is “not to be dependent” on Cave Creek Water.

“Stage 4 happened immediately,” Rowland told The Desert Advocate. “Really, we didn’t have any problems before–it came on suddenly.” She reported having no problems moving into the winter months and even into the beginning of summer.

“The good news is that we are currently constructing a temporary line from Arizona American Water into our system,” Rowland continued. “We should be back online today after the bacteria tests come back. They (Arizona American Water) have assured us that they have a great quantity of water and they are working on a permanent solution.

“Everyone else pretty much has their water back. We have one difficult area–16th Street to 24th Street and Cloud to Joy Ranch; that area has been many years supplied by CCWC.”

Troy Day, production director for the Western Region of American Water Co., said Tuesday,

“There are adequate resources this summer for the Anthem system because it hasn’t been fully built out, so we can help Desert Hills. Our water is being sold (to Desert Hills Water); the Anthem rate payers aren’t subsidizing it. In fact, it should help with their (Anthem’s) infrastructure costs. We are looking at this as a temporary solution.” 

According to ACC’s Heather Murphy, “The bottom line is that Desert Hills Water needs to put some wells in the ground.”

Concerned residents can call Consumer Services at the Arizona Corporation Commission (602) 542‑4251.

Reach the reporter at jennifer@thedesertadvocate.com.