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The Verde Independent | Cottonwood, Arizona

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12/14/2013 1:14:00 PM
Verde Village couple asks Legislature to change municipal water oversight
Gozdanís petition:
To: Members of the Arizona State House of Representatives; Members of the Arizona State Senate

The signers of this petition, registered voters in the State of Arizona, believe a change in legislation is needed in order to curtail unregulated increases in service fees by municipal water companies who operate outside their municipal boundaries, by having them comply with Title 40, Article 7 of the Arizona Administrative Code. The recent increase in water service rates by the Cottonwood Municipal Water and Wastewater Utility (CMWWU) serves as an example. "Inside Service Customers" - those living within Cottonwood City Limits, saw an increase of 30% in their monthly service charge. "Outside Service Customers" - those serviced by the CMWWU living outside Cottonwood City Limits, saw an increase of 67% in their monthly service charge. By comparison, Chaparral City Water and Chaparral Water have tariffs for water service charges that appear to be reasonably different - less than 6% difference between City and non-city service rates; however, even here there is a 40% difference in water usage tariffs.

We understand that CMWWU may also be collecting fees, specifically for Yavapai County Water Advisory Committee, Resource Development and Gila River Adjudication that might be mishandled.

While increasing government intervention is generally opposed, we urgently request that those who represent the citizens of Arizona take action to close the "loophole" which allows municipal utilities, such as the CMWWU, to operate without oversight which would ensure fair and balanced treatment of all their customers.

Jon Hutchinson
Staff Reporter

COTTONWOOD - A Verde Village 6 property owner has organized as petition drive to protest the disparity in what Cottonwood charges between water sales for City customers and those for customers outside the city limits. Now he is looking to change all state law .

Alex Gozdan says he and his wife are supporting a campaign that Supervisor Chip Davis has taken to the Legislature to ask that municipalities rate increases appear before the Arizona Corporation Commission, the way private corporations do. Gozdan says Davis talked to him about the water issue at a community meeting the supervisor held Dec. 9 at the Verde Village POA Clubhouse.

Davis believes the issue is a statewide problem, not merely a local one.

The City has responded to the same complaints during a rate-change public hearing.

Gozdan says Verde Village residents formerly could take their beef to the ACC when the water company was privately owned as Cordes Lakes Water. The cover letter expresses that concern: "When those private companies are bought by municipal water utilities, regulation stops, leaving consumers no recourse when rate hikes are exorbitant and unequal between those living within municipal boundaries and those who reside outside those boundaries, basically taxation without representation."

Recently, the city council raised water rates to hedge the plummeting of its water bonds' ratings and to maintain a ratio of 1.35 percent between rates and expenditures as required by bond covenants. Water-use fees were raised 30 percent within the city but 67 percent for customers outside the city limits.

Gozdan says he took the disparity to the Goldwater Institute, which recognized there is precedent for those differences.

Davis has written area legislators repeatedly pursuing the same answers. In November, he told the state senators and representatives, "I believe it is time that we consider changing legislation to ensure that the citizens in the unincorporated communities have a voice."

Gozdan hopes to collect enough taxpayers signatures to convince legislators to put the changes into law. Gozdan can be contacted at

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Reader Comments

Posted: Sunday, December 22, 2013
Article comment by: Alex Please Use (CDO) for my name Gozdan

I would like to Thank Jon Hutchinson and the Verde Independent Staff for publishing this article. This is and issue that is affecting most rural and municipal customers through out the state of Arizona. Besides the high rate increases being imposed on all customers there have been many reports of meters being misread to the benefit of the utilities. To all in the Verde Villagers and others locate your water meter and start monitoring your own usage. The easement where the water meter is located and where the utilities run there lines is YOUR Property and YOU pay property tax on that square footage whether you can use it or not.
Thank You Larry Mosher for providing a new insight to another municipal utility associated problem (the bond owners).

Posted: Wednesday, December 18, 2013
Article comment by: Hey Joker

I didnt buy my house from a crook. I bought my house from a private owner who had bought it from the private owner who had it custom built 30 years ago. Im using my house to raise my kids all by myself. When I house shopped, I wanted to live in Cottonwood proper, but really could not beat the price of what I was getting in this house. Whenever the issue of annexation has come up, I have supported it, for this very reason of utilities and municipal services. The fact that my water bill has nearly doubled puts a huge burden on my already strained and frayed budget. I had no choice in this matter. None. If I want to bathe and drink I have to pay this unfair increase. I already conserve everywhere possible and I cannot find anywhere else to cut my water usage. I think the costs of repair ect should have been figured when the city purchased this "junk" from that "crook". Why should my neighbors and I be penalized for the citys decision? I pay every tax that comes my way. I shop and spend in Cottonwood. I support our town and community in every way possible. I think your statement was unfair and thoughtless.

Posted: Tuesday, December 17, 2013
Article comment by: gary Chamberlain

Dear "Evil City Dweller" responder,

My family and I moved to (VSF) Cornville for a variety of reasons and if you review the annexation arguments, you'll know some of the reasons why.

Sometimes leadership makes the difference and sometimes financial considerations determine where you live, they're both important.

We are doing just fine with the services we receive in our unincorporated Cornville community, water being the exception.

Cottonwood residents aren't evil and they chose to live in Cottonwood for their reasons and we choose to live in Cornville for ours.

Gary Chamberlain
Cornville AZ

Posted: Tuesday, December 17, 2013
Article comment by: Fact Check

Gary you continue to enjoy paying those $40 plus rates for substandard wastewater service from an out of state utility while we evil city dwellers pay the outrageous new monthly fee of $26.25 for city wastewater service. While you whiners are at it why don't you tell us city folks how nice it is to pay the fire district tax.

Posted: Tuesday, December 17, 2013
Article comment by: Deflection much ?

So per previous articles and comments, the county supervisor fails to represent his constituents at the 18 months or more of regular meetings that were held in the rate setting process, and now he is blaming the City or the ACC for it?

Once his constituents figured out that the one they should be upset with was the guy that failed to represent them in the first place?

Now they are on the 'waterwar'path over it. priceless.

Yeah lets hand control of our local resources over to the Corporation Commission... surely they will be more concerned about it than the very people that live in the area.

Heck even the Goldwater Institute saw that there were precedents for the differential rates... proving that they are not out of line.

Sour grapes sure make people pucker don't they?

The County Super should admit he blew it rather than try to deflect the blame to others.

Posted: Monday, December 16, 2013
Article comment by: gary chamberlain

Dear Editor,

Is Cottonwood soaking all unincorporated communities?

When and If the City of Cottonwood purchases the private sewage plant in the Cornville Verde Santa Fe community then Cottonwood's attempt to force the Verde Santa Fe annexation could be advanced.

Taxation without representation?

Gary Chamberlain
Cornville AZ (VSF)

Posted: Monday, December 16, 2013
Article comment by: Slater slater

The inter-city being compensated by the county dwellers.The dog waggin the tail agin.

Posted: Sunday, December 15, 2013
Article comment by: What a Joke

These people bought houses from a crook who went to prison for his corruption in building junk houses with junk utilities. The water system was ignored and in poor condition when the city of Cottonwood step in to save it. For several years we citizens of Cottonwood have been pay more to fix their junk water system. Now the city equalizes the issue to make them pay more to help pay the cost of the repair. Now they whine to the legislature?! Maybe we should float a bill to make them pay for the junk they bought into.

Posted: Sunday, December 15, 2013
Article comment by: Great work Alex Gozdan

Water customers living both within and outside the city of Cottonwood owe a great deal of thanks to Mr. Gozdan for making this effort.

Of course noncity customers took the hardest hit, but with a poverty rate in excess of 20%, this increase also hurts the economically disadvantaged living in Cottonwood as well.

None of that matters much to the oligarchs that control Cottonwood. They put into place a discriminatory rate increase that was entirely unnecessary. This city runs an enormous monthly surplus on just sales tax revenue alone. This largess is largely fueled by noncity residents who shop in the city.

The city's solid financials were well noted by bond analysts who downgraded the city's rating. (The downgrade was not remotely close to a plummet as reported in this article). But pretending the city was in dire financial straits served their rhetorical purposes.

Let's also not forget the excessive fees tacked onto every water bill for al customers. Charging these to noncity customers also may be illegal.

Let's hope the petition drive is successful and the state legislature takes action. This should happen for fairness and effective representation of all parties.

Beyond this, let's remember that with a stronger elected council, the city staff that controls Cottonwood for its own purposes would be largely neutralized. But only one councilman voted no on this issue, Ruben Juaragei, and he deserves recognition for having the backbone to do so.

The rest on the council appear to be not much more than rubber stamps for a self-serving city government that puts itself before people.

Posted: Sunday, December 15, 2013
Article comment by: larry mosher

As a case in point I got hit with a double whammy. I live in Verde village 8 and had to suffer the rate increase My water has gone from about $25 when the private firm owned the system, to over $45 under cottonwood supervision. I also bought a water revenue bond and watched it 's rating drop because the city couldn't manage it's finance's. Let them go somewhere else for funds to build a new city hall, PLEASE................

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