BULLHEAD CITY — Among the 125 or so people who attended the town hall hosted by EPCOR Water Arizona, Inc., on Tuesday night was Bullhead City Manager Toby Cotter.
He has some observations about the presentation by EPCOR in opposition to Proposition 415, which asks voters to support acquisition by the city of EPCOR’s local water infrastructure.
That there was no mention by either Shawn Bradford, vice president of EPCOR’s corporate services in Arizona or Joe Conner, an eminent domain attorney with Baker Donelson in Chattanooga, Tennessee, during the town hall, about rate hikes by EPCOR since it acquired the utility infrastructure several years ago from Arizona American Water Company.
Cotter, Mayor Tom Brady and various city council members have cited significant increases — and the potential for more increases — for water service by EPCOR as the primary reason why city officials decided to explore acquiring their system. The city already possesses the actual water rights.
Rates went up this spring by 27% to 34% after EPCOR sought interim rate increases for area customers after its long-term rate and consolidation plan seeking nearly 60% hikes failed. EPCOR will bring another long-term rate plan to the Arizona Corporation Commission in May of 2020, that city officials have said they believe will result in another increase in 2020 or 2021.
There also were rate increases of about 34% that occurred in 2015 and 27% that began in 2012, according to previous reports.
“I am happy that EPCOR said statewide consolidation is now off the table, especially since they lobbied hard in front of the Arizona Corporation Commission just a few months ago to establish statewide consolidation,” Cotter wrote in an email responding to a request for comment from the Daily News.
Regional consolidation still is being considered that could result in Bullhead City residents sharing in rates with other customers in the region, such as Lake Havasu City or Parker, Cotter noted.
Conner talked about a variety of court cases in which local governments sought to take over private water company operations with valuation judgments that were substantially higher than the estimates obtained by the municipalities.
They were simply “consistent with EPCOR’s position” because none of the examples involved a single Arizona water company or EPCOR system, said Cotter. “I could point to others that tell a different story.”
And, it’s not common for either side in such court cases to accurately estimate the worth of a utility system before an acquisition attempt reaches a courtroom.
“Most verdicts are a compromise, so the verdict is usually higher than the government’s but lower than the property owner’s estimate of value,” Cotter noted. “For every case in which the government’s estimate proves to be low, there are others where the property owner’s estimate is high.”
The attorney made it clear, however, that his examples weren’t quick take cases — a process that would allow the city to seek immediate possession of the system before its financial worth is determined by a court. It also partially bases system worth on the date when the case is filed, but would require the city to provide compensation for any additional worth at the time the city is awarded possession.
Cotter pointed out that the court must grant the city immediate possession if it determines the city’s acquisition of the local water system is “necessary for a public use authorized by law.”
Bradford said Tuesday that a quick take process would be costly and damaging to all involved — especially if the city decides to walk away after the court valuation is too high and returns the system to EPCOR.
The city is confident it would be granted immediate possession if the acquisition of the Bullhead City water system proceeds to condemnation, Cotter said, but also noted that he doesn’t think the process will reach that level.
“I, personally, am still hopeful that it will not come to that, and that EPCOR will come to the table to negotiate a voluntary purchase,” he said.
He also stressed that criticisms expressed about Raftelis Financial Consultants, Inc, the city’s contractor, are unfounded.
“The city is pleased with the work its consultants have done and are doing, and believe their rates to be fair and reasonable in light of the complexity and scope of the assignments they were given,” Cotter added.