“(Our concern) is to make sure we keep the water on, then deal with the legal aspects,” said Commissioner William Mundell.

Mundell’s comments came days after Cave Creek purchased the beleaguered water company for $2.5 million–a surprise move that was the result of closed‑door negotiations since March between the town and DHW. The utility has come under scrutiny by commissioners since June because of its inability to provide adequate service to more than 200 of its estimated 1,600 customers.

At the time of the sale, commissioners were investigating whether DHW violated state regulations.

Still in question is whether DHW vice president/manager Mary Beth Rowland will be held accountable if commissioners find her company was in violation. Under terms of the sale to Cave Creek, the town acquires all assets and assumes the company’s liabilities.                

Rowland did not return calls placed by The Desert Advocate seeking comment.

At issue during the hearing was whether the utility remains under the control of the commission or under Cave Creek. Commissioners also questioned just how stable water service will be under the auspices of the town.

Commissioners repeatedly asked town officials if they would agree that the commission retain jurisdiction over the water company. Some town officials gave vague responses, while others said they were uncertain.

Frustrated by those responses, commission Chairman Jeff Hatch‑ Miller said, “We will assert jurisdiction until a court says ‘no.’”

“We have no plans to contest jurisdiction on the issue of customer complaints,” stated Cave Creek Mayor Vincent Francia.

Commissioners raised questions as to Cave Creek’s motives for purchasing the company, the town’s plans regarding completion of a DHW booster station, and whether operation of the company was in good hands to ensure water service to customers.

In response, Town Manager Usama Abujbarah said Cave Creek is aware that they purchased a “distressed” water company. He further stated the town will have to invest about $400,000 a year in infrastructure over the next 10 years.

Trevor Hill, president of Global Water Resources, parent company of Cave Creek Water Co., told commissioners the $2.5 million sale price to Cave Creek will be significantly eclipsed by DHW’s liabilities, which he said could be in the tens of millions of dollars. Hill emphasized the surface water rights DHW needs will come at a “dear cost” to the town and will benefit Desert Hills customers.

Hill assured the commissioners Global will continue to supply water for a time to the DHW service area, under the condition the commission maintains jurisdiction over the utility.

In response to commissioners’ questions about the town’s  motives for purchasing the company, Abujbarah said,  “Our main purpose now is to give the best service possible to DHW customers.”

Commissioners also asked how and why Cave Creek’s purchase of DHW would benefit Cave Creek residents, given that all of the company’s customers live outside the town’s boundaries. In addition, the commission wanted to know why the town would buy a water company that serves an area it has no interest in annexing in the future.

Town officials gave conflicting and in some cases contradictory answers.

Abujbarah asked commissioners to take the responses at “face value.” He said the town plans in the long term to sell the water company to Phoenix, should Phoenix annex the DHW service area.

Cave Creek Councilman Thomas McGuire said the town was motivated to buy DHW so it can expand its water system. He also said the purchase means the town can eventually provide sewer services to the Desert Hills service area.

Commission Asst. Division Director Steve Olea stated DHW on its own does not have enough water to serve its customers during the peak summer season. The utility needs to find an additional permanent water source, Olea said.

Commissioner Kristin Mayes asked Cave Creek officials for the name of the responsible party in charge of day‑to‑day operations of the new water utility.

The commission grew noticeably concerned when representatives of the town were unable to tell them who specifically will be responsible for responding to emergency calls. After some scrambling, town officials produced the phone number of an Arizona American Water employee.

Commissioners were apparently also concerned that Cave Creek could not name the certified operator of the new utility. Added to the commission’s order was a requirement that Cave Creek name the operator by Sept. 18.

Town attorney Marvin Cohen told commissioners the town is in talks with Arizona American Water Co. to manage DHW.

On Monday, the commission scheduled a special meeting for Tuesday based on Cave Creek council’s agenda addendum related to Desert Hills Water Co.

According to commission spokeswoman Heather Murphy, the commission had several representatives in attendance at the town council meeting Monday evening.

One item on the agenda’s addendum was a vote to dissolve the Desert Hills Water Co., contrary to the commission’s recent order. Murphy said “it became apparent (before the item came to a vote) that the town understood what we were trying to do.” Continuing, “The town is prepared to work with the commission as a public service corporation.”

As a result of the Cave Creek council taking no further action, the commission canceled the Tuesday meeting.

Reach the reporter at kathleen@thedesertadvocate.com.