By Linda Bentley | NOVEMBER 18, 2015

Carefree signs agreement to close Black Mountain Sewer, end litigation

Town adds $2 million to reserves while investing $10 million in infrastructure

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CAREFREE – During the Nov. 10 council meeting, Maricopa County Sheriff’s Office Capt. Kip Rustenburg announced during Call to the Public that MCSO has a new Bell Ranger helicopter and if the town provides a date it can be brought up to show to the community.

Council stated it would take her up on that offer.

Mayor Les Peterson stated the Eastwood project requested its rezoning application and plat be continued to the Dec. 1 meeting.

L to r, Les Peterson, Scott Wakefield, Gary Neiss

Peterson provided background regarding a proposed settlement agreement that would allow for decommission of the Liberty Utilities Wastewater Treatment Plant (Black Mountain Sewer) in the Boulders community and a rate case before the Arizona Corporation Commission (ACC).

He said the multi-party, multi-attorney settlement agreement would still need to be approved by the ACC.

In the interim, Attorney Scott Wakefield, who is representing the Boulders HOA and the town, as interveners, will ask the court of appeals for a stay of proceedings in the ongoing litigation.
Peterson explained the town has no direct financial liability in the matter, but was intervening on behalf of its citizens and businesses that do.

He went on to explain what would happen if the settlement agreement were signed and if it were not.

The Liberty plant, which is approximately 50 years old, is the only wastewater plant in Carefree and despite being in complete compliance, was sued by the Marshalls, a neighboring property owner, claiming diminished property value due to odors and other nuisances from the plant.

According to Peterson, the plant was built during a time before mandatory real estate disclosures and homes were built within 200-300 feet from the plant.

Currently the plant only processes about 120,000 gallons per day, while 80 to 85 percent of the community’s wastewater is processed by Scottsdale, which has offered to process the additional sewage at $10 per gallon.

He said, because of the plant’s age, it would most likely close in 2018 anyway.

However, if the parties enter the settlement agreement now, they can buy the additional capacity at $10 per gallon, whereas if they wait, it will be fair market value at $30 per gallon and the financial “participation” from the other parties will not be available in five to 10 years.

The agreement will also eliminate future legal costs.

Wakefield stated there weren’t any great options but the settlement agreement was the best alternative.

He said there were a lot of details and it was very complex.

Councilman Mike Farrar asked what led up to the litigation and the timeline.

The attorney representing Liberty explained it began as a 2004 rate case but because of odors, they agreed to shut the plant down in 2009.

However, the Boulders Resort, which uses the treated effluent for its golf course, wasn’t ready to eliminate the plant and initiated a lawsuit in 2013 after the ACC ordered the plant closed.
Vice Mayor John Crane said the town was never involved in the lawsuit until it just recently intervened and the town had not expended legal fees.

Town Attorney Michael Wright clarified the town was actually named as a defendant in the lawsuit but was allowed to, in essence, sit it out on the sidelines while those affected battled it out in court.

Peterson said all the other parties involved had signed the agreement and the town was the last party.

Council voted unanimously to pass a resolution allowing the mayor to sign the settlement agreement.

As the town voted unanimously to accept the restated financials with the auditor’s adjustments, Town Administrator Gary Neiss explained how the town was able to put $2 million in reserves during the “global meltdown” while investing over $10 million in community infrastructure, which consisted of new administrative offices, open space, a comprehensive street maintenance program, fire protection and emergency water supply, without initiating a property tax.

Town Accountant Jim Keen said the auditor adjustments reflect reversal of accruals for grant revenue the town was to receive from the federal government in the amount of $101,405.
He said it was his 13th year of having a “very clean audit.”

During Current Events, Crane announced the 100 Club of Arizona provided a grant of $3,600 toward the purchase of radios for Rural/Metro.

Peterson said over 30,000 people came out to the pumpkin festival and thanked staff.

During public comment, Jim Van Allen said 75 percent of the merchants applauded the event, said revenue was up and all but two said to do it again next year.

Peterson announced the town had received an award from the American Planning Association, while Farrar noted two new restaurants just opened.