EPCOR board approves settlement (January 20, 2022)
BULLHEAD CITY — EPCOR’s board of directors voted Wednesday to accept the mediated settlement that will result in the company receiving an additional $20 million to complete the sale of the Bullhead City-area water systems to the City of Bullhead City.
While EPCOR officials neither confirmed nor denied the approval, Bullhead City Manager Toby Cotter said that City Attorney Garn Emery received “verbal confirmation” from EPCOR’s legal counsel late Wednesday afternoon that the board had approved the settlement.
With a Jan. 24 trial date looming, both sides were ordered by Mohave County Superior Court Judge Charles W. Gurtler Jr. to engage in private mediation.
Those talks occurred Jan. 14 and produced the proposed $100 million settlement, $20 million more than the bond amount the city was ordered to post to EPCOR Water Arizona to take possession — but not actual ownership — of the local systems.
The city posted the initial $80 million bond and took over operation of the Mohave and North Mohave systems Sept. 1. Upon payment of the additional $20 million, Bullhead City will own the systems.
The Bullhead City Council voted unanimously Jan. 18 to approve the settlement and awaited word of the vote by the 11-member EPCOR board.
Details of the EPCOR vote were not made public.
Asked for information about the vote and any comment from EPCOR Water Arizona, Rebecca Stenholm, director of public affairs for EPCOR USA, replied by email, “EPCOR doesn’t have any comment at this time.”
A subsequent similar request made to EPCOR’s corporate media relations staff in Canada directed all correspondence to Stenholm.
The agreement still must be approved by Gurtler.
“We want to close this out in the court as soon as next week,” Cotter said. “The parties have agreed. A stipulated judgment will be entered into Judge Gurtler’s court. Both sides anticipate a final order of condemnation to be signed off by the judge as part of this final process.”
It has been a long, arduous — and often contentious — road for both sides following the 2019 Proposition 415 passed by Bullhead City voters authorizing the city to pay up to $130 million to acquire EPCOR Water Arizona’s Mohave and North Mohave holdings through eminent domain.
During the initial valuation process — an evidentiary hearing in April 2020 — Bullhead City officials placed the value of EPCOR’s local holdings at around $55 million; EPCOR placed the value at $136 million, a number that was revised upward to $155 million.
EPCOR USA, formed in 2011 with EPCOR’s acquisition of the Chaparral City Water Company in Fountain Hills, Arizona, expanded its holdings with the purchase of 11 water utility districts in Arizona and New Mexico, including the current Mohave system in Bullhead City, from American Water Works Company.
EPCOR bought the North Mohave Valley Corporation, the North Mohave system, in 2013.
Following several EPCOR rate increase requests approved by the Arizona Corporation Commission — and a plan to consolidate all of the company’s Arizona holdings under one umbrella and rate structure — city officials and residents began the process that led to the 2019 special election authorizing the takeover.
EPCOR officials repeatedly said the company’s Bullhead City holdings weren’t for sale and the two sides remained far apart on what those assets were worth, sending the matter to the courts to decide.
But just 10 days before the start of the trial that ultimately would have done that, the sides came to an agreement and five days later, both sides had given it formal approval.
“The city is very pleased that the EPCOR board of directors has approved the settlement,” Cotter said. “For two years, the city has been asking the EPCOR board to approve the sale so that Bullhead City residents, through their elected City Council, can manage the water already owned in a wholly owned water system.
“This puts behind us three years of fighting and millions of dollars in lawsuits for both parties. Most importantly, this transaction provides a very bright future for Bullhead City. From now until the end of time, the residents of Bullhead City will own the water, wells, pipes, tanks and conveyance system that brings the water from the river to their homes, schools, churches and businesses.”
Source: Bill McMillen, Mohave Valley Daily News