City takes over water system: EPCOR receives $80 million following judge’s ruling (September 1, 2021)
BULLHEAD CITY — For the City of Bullhead City, it was better late than never.
The city officially began taking possession of EPCOR Water Arizona’s local systems Wednesday afternoon — about 52 hours later than anticipated — after a judge signed off on the transfer of property in exchange for the city’s $80 million payment to EPCOR.
“It is ordered plaintiff (the city) shall be entitled to take possession of the property described … all real and personal property, tangible and intangible assets, customer and business records, and plant, property and equipment used and useful for providing water service in and around the City of Bullhead City, Arizona … and by stipulation of the parties and for good cause shown upon direct payment to EPCOR in the amount of $80 million,” read the order from Mohave County Superior Court Judge Charles Gurtler Jr. “Upon taking possession of the water system, (the city) will assume sole responsibility and all associated risks of losses for, or resulting from, the operation and maintenance of the water system and EPCOR’s responsibility and all associated risk of loss for, or resulting from, the operation and maintenance of the water system will cease.”
Gurtler, who recently retired but remained as the overseer of the case after presiding over the evidentiary hearing that set the $80 million bond amount, announced his decision electronically at 11:08 a.m., explaining what considerations the court gave to objections and responses from the parties, then made it official by filing the order two minutes later.
About 40 minutes after that, Bullhead City Manager Toby Cotter received a receipt confirming that EPCOR had received the $80 million.
“They got the money and we get possession of the water system,” Cotter said minutes after receiving the confirmation.
“We’re all excited to finally reach this point,” said Mark Clark, the city’s first utilities director, who stepped away from the Bullhead City Council to oversee the acquisition and operation of the water system.
The city already operates the local sewer system. Both water and wastewater will be operated by newly branded Bullhead City Utilities.
“There was a lot of work behind it,” Clark said. “Now, there’s a lot of work ahead.”
Cotter said the transfer was significant and should send a message.
“11:10 a.m. on Sept. 1, 2021, will go down as one of the most historical moments in the city’s history,” he said. “I appreciate the swiftness of the court and the ruling of the judge granting possession of the water system to the residents and property owners of Bullhead City through their local government. The City Council already has saved all water users hundreds of thousands of dollars by freezing rates.
“Local control is by far the best way to operate a water system. No Arizona community should want its water rates and systems controlled by a Canadian city. Edmonton’s desire to see great dividends from communities like ours is a travesty and should not be allowed.”
This isn’t the end of the city’s eminent domain proceedings, however.
A jury will decide in January the final sale price for the Mohave and North Mohave systems; the bond only gave the city possession and the right to operate the systems.
If a jury decides the value is more than $80 million, the city will have to come up with the difference. If the jury determines the value to be less than $80 million, EPCOR will have to make a refund.
Cotter said EPCOR could have prevented the protracted, costly battle.
“We gave them the chance to save face. We gave them the chance to allow us to purchase the system for $55 million.” he said. “The egos in Edmonton will not accept the fact that people of Bullhead City do not want them in control of our water. EPCOR has been forcibly removed from Bullhead City.”
That was the right move, said Marti Blad, deputy utility director.
Blad, who joined city staff in May, has an extensive history working with water systems. She was director of the utility authority for the Yavapai-Apache Nation for six years and spent four years with the Arizona Department of Environmental Quality.
“I think communities should be in control of their water system,” said Blad, who has a doctorate in civil engineering and a master’s degree in environmental toxicology/environmental science. “We can make decisions on what we want, what we need. All citizens have a say.”
Cotter agreed with that point.
“We are here. We are available,” he said. “Every first and third Tuesday of the month … any water user can come to the podium and tell the City Council and me how they feel about the water service and the rates. That was never available before.”
That was the impetus behind Proposition 415, a voter-passed initiative that gave the city the authority to proceed with eminent domain proceedings.
The city contended — and by passing the proposition, the voters agreed — that EPCOR’s repeated rate increase requests before the Arizona Corporation Commission as well as a plan to consolidate all of its Arizona holdings gradually were raising the cost too high for delivery of water already allocated to the city.
Now, any rate increases, decreases or other adjustments will come from the City Council with the public given adequate notice and a chance to voice opinions in person.
“Local control,” Cotter said.
The city had hoped to take possession of the Mohave and North Mohave systems on Monday but Gurtler delayed the decision until Wednesday, causing some uncertainty among both parties.
Part of the delay was procedural after EPCOR twice filed motions objecting to the language of Bullhead City’s order for immediate possession and the city twice responding to those objections.
“Given procedural due process rights the court had to allow the city time to file any response,” Gurtler wrote in the announcement of his decision. “This timeframe coincided with the time allowed by the Rules of Civil Procedure and further coincided with the timeframe the court and clerk’s office calendared to ensure timely review of the matter.”
Another complication was the vacation of Kelly Andrews, a temporary judicial assistant assigned to Gurtler as he resolves several lingering court matters following his retirement earlier this year.
“Unfortunately, the city and EPCOR filed documents when Ms. Andrews was out,” Gurtler wrote.
“That’s all behind us,” Cotter said of the unexpected wait. “Now, it’s time to move forward.”
Moving forward, Clark said residents won’t see any immediate significant changes in water operations.
“Our goal is that they don’t notice anything,” he said. “Well, maybe better service. Better responses.”
Source: Bill McMillen, Mohave Daily News