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City accuses EPCOR of violating “gentleman’s agreement” on consolidation

January 13, 2019

BULLHEAD CITY — Mayor Tom Brady and City Manager Toby Cotter both said the city tried to play nice with EPCOR Water regarding consolidation and rate increase plans.

Not any more.

“We will continue to fight any form of consolidation,” Brady said during Friday’s special meeting of the Bullhead City Council.

Cotter and Brady spoke at length about the history and dynamics of the city’s efforts to oppose a statewide consolidation of EPCOR Arizona’s 11 water districts — a move that would increase local water rates significantly. EPCOR was ordered by the Arizona Corporation Commission to present options during a rate increase hearing; the options presented included rate increases for stand-alone districts and one rate structure for a consolidation of all of EPCOR Arizona’s system. The city fought both of those options, contending that neither was in the best interest of Bullhead City residents. At one point, the city was ready to ask voters to authorize a takeover of the EPCOR system in Bullhead City but, after what the city termed at the time a positive meeting with EPCOR officials in Edmonton, Alberta, Canada, an initiative was pulled from the November ballot. In its place, the city presented to the ACC a plan to consolidate four Mohave County elements of the EPCOR system.

Now, however, Brady and Cotter both said that meeting didn’t turn out as positive as they first thought, accusing EPCOR of violating “a gentlemen’s agreement” to support the regional consolidation.

“The gentlemen’s agreement was not a gentlemen’s agreement,” Cotter said. Instead, EPCOR said it supported Bullhead City’s right to propose regional consolidation but did not, as a company, support that option. That came as somewhat of a shock to Bullhead City officials.

“We asked EPCOR to support the alternative,” Cotter said. “They did not do that.”

The ACC has scheduled EPCOR’s rate and consolidation requests as part of the commission’s meeting Tuesday and Wednesday in Phoenix; the city council moved its meeting from Tuesday to Friday to allow commission members and city staff to attend the ACC hearing.

“Keep in mind, the Arizona Corporation Commission gets to vote however they want,” Cotter said.

But, he added, an administrative judge recently issued an opinion against statewide consolidation, essentially backing some of the city’s arguments. Whether that opinion carries any weight with the corporation commission isn’t known.

Brady said it should, but even if it doesn’t, the city is digging in against statewide consolidation, which he said essentially forces Bullhead City residents to subsidize EPCOR systems in other parts of the state with rates that could be 30 percent to 50 percent higher than current rates.

Brady continued to insist that the water systems in the Bullhead City area are far different from systems in the Phoenix area; residents in Bullhead City have a different economic demographic than those in other parts of the state, as well.

“We don’t want it,” he said of consolidation. “We want a stand-alone system. More importantly, we want to own our own system.”

That means voters likely will be asked sometime this year to authorize the city to acquire the local EPCOR assets, either by a willing sale or by condemnation proceedings. Cotter repeated Friday that EPCOR is “not interested in selling to us.”

Brady cautioned that Friday’s motion to rescind the resolution supporting regional consolidation was not the start of condemnation.

“We’re not condemning them now,“ he said. “We’re going to explore.”

That exploration, Brady said, would be to find a solution “for the best interests of the public.”

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