Who says you can’t teach an old dog news tricks — even when it applies to a public utility. The 750 customers of the Oak Creek Water Company may soon see the company running a little differently, but according to its president, Doug Bowen, it will be for the better,
“It’s a financial benefit for every customer,” he said. The not-for-profit company, which has been serving West Sedona for 66 years, has some high-price improvement projects that need to be addressed in the very near future. After doing quite a bit of research, it was determined the best route for the company would be to seek becoming a Domestic Water Improvement District [DWID].
Talk of becoming a DWID began a year ago after it was determined the company’s levels of arsenic exceeded that allowed by law. Treating the arsenic will cost $600,000.
“Our annual revenue is a little over $500,000 so that’s a big chunk of money,” Bowen said. “Having been around since 1953, our system is also getting older and we have a lot of improvements to do.”
Billing has remained low for many years, he said, noting that 30 percent of their customers pay around $17 a month.
Last year, Bowen attended a meeting in Phoenix and learned about funding and grants from various federal agencies. He gave a presentation as to what OCWC needs in the near future. Several representatives told him he should look into becoming a DWID because it would open up the door for funding.
When he left, the only thing offered was a loan from the state at 4.5% for 20 years to deal with the arsenic issue. That would equate to about $4,000 a month they’d have to pay. But he also found a loan through the United State Department of Agriculture at 2.25% for 40 years and a possible matching grant.
“So for that $4,000 a month payment we’d probably be getting around $2.4 million,” he said. “That could fix the arsenic, refinance the loan we have and replace hydrants and water mains that need improvements.”
In addition, they pay property taxes to the county on their half dozen, company-owned parcels that house their wells, tanks and office. Being a governmental agency — as a DWID — they would no longer have to pay those annual taxes, which equate to nearly a month of revenue.
Finally, whenever the water company currently requests a rate increase, it must go through the Arizona Corporation Commission for approval at a cost of nearly $40,000. As a DWID, they would not have to go through the state for a rate increase. That would be voted upon by its customers and board at a cost of around $1,000. But, they would still have to meet all Arizona Department of Environmental Quality standards.
“We’d save a lot of money as our own governmental agency under Yavapai County,” said Bowen, who worked in county government before moving to Sedona two years ago.
The OCWC board, which is currently made up of nine members, met and agreed this was the route to take as did the company’s attorney, who represents 15 to 20 DWIDs. They met with the county this past spring and then held a meeting with OCWC customers in July. After all the questions were answered from the customers and board, he said they could not find any reason to not seek becoming a DWID.
“If approved, we would become more of a political entity,” he said. “There would be a little more pressure on our board and everything would be open to the public, including our meetings and records. Any resident who is a customer of Oak Creek Water can become a board member.”
Following the July meeting they began a petition among the customers seeking their support. As of Monday, Aug. 19, they received 362 signatures, which is 85% of the property owners that live in the district and 55% overall when including short-term vacation rental owners and renters.
They have passed the Arizona Revised Statue requirement of 51% but they want to surpass the 60% Yavapai County would like to see. They want to exceed that by their September meeting.
There are more than 800 parcels — some of which are vacant — that fall within OCWC’s jurisdiction. Once the signatures are received, they will send letters to customers asking if they wish to be part of the DWID. If they choose not to, they will remain a customer but they cannot be a board member or have the right to vote on company matters, elections or rate increases.
“Basically, all their neighbors would be deciding for them,” he said. The county will analyze the signatures and petition for authenticity and then it sends out a notice to the customers regarding a public hearing. After that, the state will be asked to sign off on the request. Around the first of the year, the company saw two of its pumps go down, which required emergency funding from the state for $60,000 to replace them. Customers saw a $20.16 monthly increase for four months to cover the emergency loan.
OCWC was told by the ACC at that time that the company must file for a rate increase within a year. This will have to take place prior to the company receiving the DWID status and will go through the normal ACC process. This rate increase is estimated to be 14%. Based on the progress they have made so far, Bowen hopes that everything is approved by spring of 2020.
“I’m very optimistic,” he said. “We’re beginning to see the light at the end of the tunnel.”
Ron Eland can be reached at 282-7795, ext. 122 or by email at reland@larsonnewspapers.com
