Desert Hills Water costs town another $12,000
by Kathleen Stinson

CAVE CREEK – Maricopa County Environmental Services Department in a settlement agreement penalized Cave Creek $12,000 in connection with its assumption of liability for an enforcement action against Desert Hills Water Co.

The county also gave the town 30 days to submit a plan for providing adequate water pressure and storage, as well as water supply to deal with current and future subdivision growth, as stated in the agreement between the town and the county. Cave Creek bought Desert Hills Water on Sept. 13 at the height of the company’s problems in serving customers.

Under the agreement signed Nov. 27, Cave Creek has taken responsibility for a noncompliance action the county filed against Desert Hills Water just two days before the town acquired the troubled utility. Desert Hills Water did not admit to any of the county’s allegations as part of the settlement.

According to the agreement, Cave Creek took responsibility for all open enforcement actions when it acquired the water company.

Town Manager Usama Abujbarah said last week the town’s master plan for Desert Hills Water improvements will go before town council by February 2007 and public hearings will be held.

“On Sept. 11, 2006, MCESD issued the Notice of Violation and Demand for Compliance to Mary Beth Rowland, Desert Hills Water Co., demanding the water system be brought into compliance with the Maricopa County Environmental Health Code and the Arizona Administrative Code,” the agreement recites.

“This does not address any of the issues the Corporation Commission may have outstanding (with DHW),” said John Kolman, Maricopa County Drinking Water Program manager.

Last summer, Desert Hills Water customers experienced sustained morning water outages. After complaints to the state Corporation Commission, the agency held an investigative hearing to determine if the company had violated state regulations in connection with its service problems. An administrative law judge recommended in August as much as $500,000 in fines, if the water provider does not meet deadlines to correct its problems. The commission’s final decision is pending.

The town’s attorney, Marvin Cohen, has said that under the purchase agreement Cave Creek would assume any fines the commission may impose.

“I am wondering who has the (courage) to vote that town council out and one in that can start making decisions that aren’t going to cost Cave Creek this kind of money,” said Desert Hills Water customer Rich Goldstein.

Pursuant to the settlement agreement, Cave Creek agrees within 10 days to submit a water master plan. Within 30 days, the town must also submit a formal agreement between Desert Hills Water and Arizona American Water, Anthem’s provider and current operator of the Desert Hills utility, with respect to a connection between the two systems, should Desert Hills need water in an emergency.

The stipulation and payment of the penalty reflects a full settlement of all claims arising out of the county’s Notice of Violation and Demand for Compliance, the agreement states.

Once Cave Creek meets the milestones set out in the agreement, the county will allow developers to proceed with the normal approval process for new water line hookups in the Desert Hills Water service area, Kolman said.

Reach the reporter at kathleen@thedesertadvocate.com