Cottonwood postpones water company resolution

Members of the Cottonwood City Council did not approve a resolution that would give the City's staff and legal team the authority to move forward with the acquisition of three local water companies on Tuesday night.

But their reasons had nothing to do with the protests from the audience.

The resolution was on the council's Aug. 3 agenda for consideration and possible adoption. It directs the city's finance director to execute the documentation necessary to issue revenue bonds and administer the proceeds.

The bonds are actually issued by the Cottonwood Municipal Property Corporation (MPC). The MPC is an arm of the City and would actually hold onto the debt as a corporation, leasing the water companies back to the city. The MPC would not be held liable for the debt, and all assets would go directly to the city once paid off.

The city council met in executive session during the regular council meeting. Once back in public meeting City Attorney Melinda Garrahan said she was recommending to the council that they table the resolution indefinitely. So many attorneys have been involved, she said it was important that they all agree.

"It's simply not ready yet," Garrahan said of the resolution.

Doug Evenson, chairman of the newly formed Concerned Citizens Committee, spoke during an earlier agenda item. He protested the city's plans to acquire the three water companies.

He said his group had over 700 members as of Tuesday night. They oppose the takeover because of the higher water rates that are planned.

Evenson told the council they would be breaking state law if they went ahead to issue bonds without an election.

"I implore you not to break this law," he said.

After the council made the decision to table the resolution, Vice Mayor Randy Lowe asked about Evenson's statements.

"If this is legal, how is it legal," he said"

Michael Cafiso, the City's bond counsel, said Cottonwood was doing what just about 90 percent of other Arizona municipalities have done when acquiring assets.

He said that the statute cited by Evenson addressed only one way that a city could get money for purchases.

Evenson spoke to the council again, still firm in his belief that the council was on its way to doing something illegal.

He said he expected to have more than 1,000 members soon. Evenson threatened with words of an injunction and even a citizen's arrest.

"If we turn this committee into a voting block, it will be the biggest voting block in the Valley," Evenson said.

Council members Bob Rothrock and Diane Joens both spoke to Evenson's statements.

Rothrock told the audience the city was buying companies that needed repair. He said municipal ownership is key for the future.

Joens spoke passionately about the need for new water resources and water conservation.

"What is it going to be like when you turn on the faucet and there's no water? It's coming folks," she said.

She said she's deeply committed to the idea of public ownership.

"I don't think we're going to be able to pull through this with four little companies that can't put their money back into infrastructure," Joens said.

After the meeting Assistant City Manager Robert Hardy said the resolution delay shouldn't change the planned city takeover date.

However, the council will have to approve the resolution in a public meeting before the acquisition is complete.

"We're still proceeding with the acquisition Aug. 18," Hardy said.

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