Cave Creek offers to buy Desert Hills Water Co.
by Kathleen Stinson

CAVE CREEK – In an unexpected move, Cave Creek is offering to pay $2.5 million to buy the embattled Desert Hills Water Co. 

Town officials told The Desert Advocate on Tuesday that DHW has accepted the offer. Company vice president Mary Beth Rowland refused comment. Town council was slated to vote on the deal Tuesday evening.

Town Manager Usama Abujbarah said Cave Creek has been working on the acquisition for a long time.

The town is discussing a separate agreement with Arizona American Water Co., Anthem’s service provider, to manage DHW and supply water–if the sale is finalized, Abujbarah said. Arizona American spokesman Kevin Tilden confirmed the town and his company are in talks.

If the council approves the transaction, the deal will be consummated no later than Friday, the town manager said.

Although Abujbarah told The Desert Advocate the town is working with the Arizona Corporation Commission, spokes‑woman Heather Murphy said the commission has not been working with Cave Creek on the matter.

Murphy advised that if Cave Creek and Rowland finalize the sale, then the town will have to ask the commission to transfer the water company’s certificate of necessity.

The commission since June has been investigating the troubled water company for possible violations of state regulations and its inability to provide adequate service. Murphy said she does not think the sale would affect the commission’s investigation.

According to Mayor Vincent Francia, “If Global Water Resources were to purchase Desert Hills Water ... it would make the (town’s) condemnation proceedings (to acquire Cave Creek Water Co.) too expensive for the town to handle.”

Global Water Resources, the parent company of Cave Creek Water, offered to purchase Rowland’s company last year, but DHW did not accept the offer.

Cave Creek, in an effort to gain local control of its water service, in 2005 filed a condemnation suit to acquire Cave Creek Water Co. from Global. That case is pending in Maricopa County Superior Court.

Francia said if the town annexes beyond its western boundary as planned, purchasing DHW will enable the town to service the newly annexed area.

Global Water, in order to alleviate DHW’s water outages, recently built a booster station along Cloud Road. The station went operational last week.

Despite that, Vice Mayor Dick Esser said, “Global has not done well by us.”

Global spokesman Paul Walker said, “This really is our worst fear come true – Desert Hills has taken Arizona American’s and Global Water’s benevolence and used it to extract more money for their owners.

“The town has been hostile to Global Water since Day One,” Walker continued.

Cave Creek has refused, “even when the public’s health and safety are at risk,” to let Global make any improvements to Cave Creek Water Co.’s system because doing so would increase the value of the company, he said, making an acquisition through condemnation more expensive.

“Given that, the contract to provide water to Desert Hills expired over a year ago,” Walker pointed out. “As you know, there is no legal requirement to continue to provide water to DHW.”

According to Francia, the town is still talking with Global and has never refused the applications. In addition, Francia stated the public safety is not at risk.

Desert Hills Water customer Mike Gilson said, “I fail to see any value to the town of Cave Creek in owning Desert Hills Water; it does nothing for their residents, as far as I can tell.”

Reach the reporter at kathleen@thedesertadvocate.com.

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