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Customers angry over Cave Creek water deal
by Kathleen Stinson

DESERT HILLS/CAVE CREEK – Desert Hills Water Company customers expressed fear and outrage before the Arizona Corporation Commission last week over Cave Creek’s purchase of the troubled water company.

In addition, about 30 disgruntled customers met Monday with an attorney to discuss the possibility of suing former DHW vice president/manager Mary Beth Rowland, her company and the town.

At the public hearing Sept. 14, a group of customers told the commission they fear the town will not adequately protect their interests. The Desert Hills Water service area is not within the boundaries of Cave Creek and, as such, customers would not have the power of a vote, they pointed out.

Some customers said they were also worried the commission might lose oversight of the company and its operational problems.

During the public comment period, DHW customer Barry Sprink compared the deal to the Boston Tea Party–taxation without representation.

“If Cave Creek takes over, the town doesn’t answer to us. So if a big pump breaks down, what motivation do the voters of Cave Creek have to vote (money) for other people’s water?

“I appreciate you putting the brakes on this thing before it runs away,” Sprink told commissioners.

The hearing was held to look into the town’s $2.5 million purchase of DHW.

“I am absolutely appalled that a municipal government has dealt in a way that seems underhanded–to purchase a water company to prevent Global from ever owning a piece of it,” customer Rich Goldstein said. “I believe she (Rowland) should be held accountable to the families who went without water.”

Cave Creek officials and Rowland did not return calls placed by The Desert Advocate seeking comment.

With regard to a lawsuit against Rowland and her company, there was also some talk of legal action against Cave Creek. Colby Kanouse, an attorney with the Scottsdale‑based firm Franklin & Associates, spoke to residents about the possible suits.

“Nobody wants to get rich with this (lawsuit); we just want to put Mary Beth Rowland out on the highway with a sign that says: Will work for water,” said Sam Perrone, a DHW customer affected by the summer’s water outages.

Another customer, Lori Biondo, said, “I was shocked to hear Cave Creek bought the water company in an overnight deal– not to mention commercial development at Carefree Highway and 24th Street. How many other surprises are we in for?”

Cave Creek, in its application to annex 11 square miles west of its present border, has requested a density transfer to bundle commercial development in the area along Carefree Highway.

At one point, an extremely distraught Desert Hills water user came close to tears, shouting at Cave Creek Councilman Thomas McGuire during a break in the proceedings.

Before the sale to Cave Creek, the commission recently held a hearing to look into whether DHW violated state regulations with regard to its inability to provide adequate service to 200‑plus customers. Those customers experienced sustained morning water outages for several months.

DHW customer Mike Gilson said the transaction between the town and water company “sounds like it was stuck together with bubble gum.”

“The whole thing (sale) was ill‑conceived and we will be left with no representation if the company is yanked out from the corporation commission (jurisdiction),” Gilson said. “These guys are totally unprepared for this takeover,” he added.

Goldstein requested the commission appoint an interim manager for the utility.

At the conclusion of the meeting, the commission issued an emergency order prohibiting Desert Hills Water from altering its status as a public service corporation, thereby asserting continuing jurisdiction over the company and its operational problems.

Reach the reporter at kathleen@thedesertadvocate.com.

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