Carefree Truth
Issue #647, May 21, 2018
Following Greg Crossman's Water Study presentation, the Mayor opened the meeting to questions from the Council members. Councilman Mike Farrar noted that Councilman Gene Orrico had asked if there were penalties in place if the study is not completed within the specified 300 day time period. Mr. Farrar asked if a hold-back provision, tied to a 300 day performance timeline, is included in the contract.
Mr. Crossman repeated that Coe & Van Loo (CVL) will be paid on a monthly basis for completed work, and said that CVL is eager to begin. Mr. Farrar asked if the Request for Proposal (RFP) that was returned to the Town was congruent with what was sent out, stating that Mr. Crossman had said Carefree was not able to do all it wanted to do in Neighborhood A. He asked what was missing. Mr. Crossman again explained that what Carefree was not doing at this time was looking at Neighborhoods B & C. The contract with CVL included everything Carefree wanted to get for Neighborhood A.
Mr. Farrar questioned why he wasn't seeing Schedule C in the Council packet. Mr. Crossman explained that it is labeled Exhibit C and is the schedule that was referenced.
Councilman Stephen Hatcher asked if a plat would be developed that defines the pipe sizes, scoping for the condition of existing pipes, the sealing of potential leaks, and repair recommendations. Will it be a composite report on the physical condition of the whole piping system? Mr. Crossman replied that the report will include inconsistencies and areas of concern. Exact leaks are difficult to determine, but they will determine pipe areas, booster pump stations, and other surface facilities that are deficient from lack of maintenance and not up to standards. They will talk to Cave Creek's maintenance staff to find out where there have been significant leaks. Recommendations will be made for improvements needed to bring any deficiencies up to standards, and the cost to implement these repairs.
Mr. Hatcher said he had been involved in a project that utilized balloons and fiberglass material fed through a piping system and expanded to provide seals and relining to prevent corrosion and future leaks. This proved quite effective and cost efficient. Mr. Crossman stated that the consultant will be looking at cost effective ways to address issues. Mr. Farrar noted that the consultant wouldn't fix the problems, but would just make recommendations and cost assessments.
Mr. Hatcher asked if there will be a software analysis once the study is done, saying it would greatly enhance the ability to work with the system going forward. Mr. Crossman explained that documentation will be provided, but no new software. They will be working with the existing model of the Carefree computer system. They can then look at dovetailing this with Neighborhoods B & C. This tool can be used into the future.
Mr. Farrar asked if there would be a rate study to determine rates for existing Carefree Water customers as well as customers in Neighborhood A, and the impact on Carefree customers. He assumed there would be a major development going into Neighborhood A, and asked if the upfront costs would be part of the study. Mr. Crossman explained that the Town anticipated coordinating with the developer. Mayor Peterson added that Carefree would enlarge the pipe, but the developer would be responsible for the cost of the water infrastructure on the property.
Mr. Farrar asked if a hydrology report would be done to see how deep under the wash on that property the pipes would have be be buried. Mr. Crossman replied, no, that comes with a developer's detailed design work if a major wash is being crossed. Mr. Farrar rephrased his question, and Mr. Crossman repeated the answer.
Dr. Krahe asked if, once the report is done, the results will be presented to the Council. Mr. Crossman assured him that the findings would be reported to the Council.
Mr. Hatcher asked the age of the existing infrastructure under Neighborhood A. Mr. Crossman replied that the majority of Neighborhood A had been developed in the 1980s and 90s, as had Neighborhoods B & C. He turned to Sentinel Rock resident and former member of the Cave Creek Water Advisory Committee (WAC) Tony Geiger for confirmation of those dates. Mr. Geiger agreed and added that all the equipment installed at the time is modern equipment that meets the current standards, but it has not been well maintained. Vice Mayor John Crane concurred.
Mayor Peterson commented that a number of things have happened in the recent past that makes the study of greater urgency than had historically been thought. There have been changes in the interpretation of some existing contracts. The contract for service in this area calls for equivalent service to those Carefree customers in the Cave Creek service area. It has now be redefined as "equivalent service, but after we have finished all of that in Cave Creek".
That gets into such areas as fire hydrant flushing and checking. Carefree contracts with Rural/Metro to perform those on an annual basis. Cave Creek has not been keeping up with the annual checks on the hydrants. A water policy was implemented by Cave Creek in December that flies in the face of the existing Intergovernmental Agreement (IGA). The policy attempts to redefine when Cave Creek will provide water and in what quantities, at their sole discretion. The rates currently under discussion could be interpreted as being discriminatory against Carefree residents as opposed to Cave Creek residents. The Mayor stated that Carefree needs to get this going and be prepared because the Town must protect Carefree's residents and to assure them a potable water supply.
https://vimeo.com/265484013
Tony Geiger had submitted a slip to speak, and Mayor Peterson called him to the podium. Mr. Geiger said he has been at this for a while and it has gotten heated. He started on the WAC in August of 2013 and finished his term at the end of 2017, serving as chair for his last 2 years. He spent 35 years in the water works industry working for equipment manufacturers.
He said they had a great team on the WAC and there are still some very good people there. One is a retired full professor of economics at ASU, a certified sustainability scientist who does consulting for large utilities all over the country. Another is a retired Fortune 5 (in the top Five, as opposed to Fortune Magazine's top Five Hundred that we normally hear about) C (as in CEO, CFO, COO) Suite executive for an oil company, who ran gas plants and has engineering and financial expertise.
It took 4 years of peeling this onion on the Cave Creek Water system to understand how bad it is. "Having worked in N.Y., L.A., and literally thousands of water companies in between, I have rarely seen something in this bad a shape that people didn't go to jail, and that's not hyperbole."
Mr. Geiger said the real point is that Carefree is to be commended for looking at this, because as the Mayor said, now there are some changed conditions. There is a very attractive development possibility on the corner. These types of problems don't come up fast; they ferment for years and aren't solved fast. Just this study will take 10 months. Mr. Geiger said he has been pushing for this for years. "You've got to start, to get to the finish line." He thought they would see an economy of scale. Willden, the rate study consultant who will be a part of Carefree's study, just did "a full financial dive on Cave Creek". They will have a model when they look at Carefree's rates and be able to punch in the B & C areas, some of the big hydraulic models; it all starts with area A. He would be surprised if areas B & C are as heavy duty as A. "So, keep up the good work."
Mr. Orrico jokingly asked, "So, where are you at, in B or C?" Mr. Geiger responded that he's actually in A but has been very vocal about wanting to do this all at once, "because the last thing we want is for someone to get left behind". This is not only a big threat to the 25% of the residents who are affected by this; this affects the whole town because Carefree gets some water from Cave Creek. It's a very precarious situation.
Cave Creek hasn't managed their water resources, which will be seen when Carefree gets into looking at Cave Creek's maintenance records. They have no records for commitments they've made for 20 years for Will Serve letters. The WAC spent 18 months recreating these commitments. Professor Smith spent hours and hours writing software to mine databases of State agencies to find out what's been done and what's been committed. There are different answers to what's left, "but it's not pretty". It doesn't allow for any cuts in CAP. CAP water comes from snow in Colorado. There's a severe drought in Colorado now, so no one can predict where we'll be with water in 5 years. "We know Carefree has done a good job and is in good shape."
Thanks to former leaders, the IGA was deep in forethought. The water that those neighborhoods in A, B & C use from Cave Creek's CAP allocation goes with them; they bring it to Carefree. Bringing in those 526 houses does not imperil the water resources of existing Carefree customers. As the drought gets worse, this will be a huge point.
The Council unanimously approved the motion to grant the contract for the study to Coe & Van Loo. Mayor Peterson called it an excellent step.
https://vimeo.com/265485739
Lyn Hitchon
Prepared by Carefree Truth
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