PRESCOTT - Depending on the outcome of upcoming discussions, Prescott could shift much of the responsibility for the $170 million Big Chino Water Ranch pipeline project to a private company.
The idea for a public/private partnership got a public airing this week when representatives from the Phoenix-based Global Water company made a presentation to the Prescott City Council during Tuesday's meeting.
From the outset, city and company officials stressed that the concept is under preliminary consideration.
In his introduction of the topic, City Manager Steve Norwood noted that city staff members were not looking for a council decision this week. Rather, he said, "This is food for thought."
Global Water President and CEO Trevor Hill agreed. "I'm not here to sell anything," he told the council, adding, "This is another perspective."
Officials say an arrangement with Global Water likely would involve the company taking responsibility for building the 30-mile pipeline from the ranchland that Prescott and Prescott Valley own northwest of Paulden.
In exchange, the communities would pay the company for the water that they import from the water ranch.
Noting that he has reviewed the pipeline engineering and design that the city has paid a consultant to do, Hill said, "It's a good design and a good alignment." Even so, he said, "When it comes to value engineering and deploying the project quickly, we could help."
In fact, Hill said he assured city officials at a previous staff-level discussion, "If I can't look at it both to save the town money and make money myself, I'll withdraw from the project."
While council members agreed that the city should explore the possible public/private partnership further, they voiced a number of concerns about the prospect.
For instance, they questioned Hill's claims about how a public/private partnership arrangement would affect city finances.
Hill told the council that if the city were to borrow money on its own for the pipeline construction, the project could have "the capacity to assume the city's entire bonding capacity."
On the other hand, he maintained that if Global Water took responsibility for the project, the financing would not affect the city's bonding capacity.
City officials were uncertain about that assessment, however. "The jury's still out on that," Mayor Rowle Simmons said on Wednesday.
A question also arose about how the public/private partnership would affect the opportunity for public involvement in the Big Chino Water Ranch
project.
"When you get into a public/private partnership, a lot of (the typical city) transparencies are gone..." Councilman Steve Blair said. "How do you propose to be transparent?"
Attorney Rita Maguire, who accompanied Hill at the council presentation, pointed out that Global Water is "highly regulated" by governmental agencies, and is subject to its own level of transparency.
Blair responded that any future agreement between the city and Global should spell out the number of public meetings that would be necessary during the course of the project.
Council members also broached questions about who would be responsible to defend against a possible lawsuit by downstream Verde River users.
Hill said he would suggest "coming up with a treaty or truce in advance." He added: "Somehow, you've got to avoid the massive lawsuit."
In addition to the council concerns, audience members brought up issues, including how the private involvement would affect city water service.
"I have a preference for the public to operate our water system," local resident Howard Mechanic said, noting that customers should be able to call a local official with concerns about their water service.
Despite the questions, Simmons said the council supports further study into the prospect. "It's definitely worth looking at," he said.
In late 2004, Prescott and Prescott Valley partnered to buy a portion of the former JWK Ranch, with the intention of importing thousands of acre-feet of water
per year into the tri-city area. Since then, the communities have been working on the pipeline alignment, design, and right-of-way acquisition.
Contact the reporter at cbarks@prescottaz.com
Reader Comments
Posted: Saturday, October 27, 2007
Article comment by:
Tom Steele
Beware Prescott, of Public - Private partnerships (PPP). Prescott Valley has a PPP with Fain Signature GRoup and Global Enertainment for the PV Event Center. This protects profits for the Private Parties (PP) while the public allows tax free status for the PP and less than disclosure on the income and outgo of the PPP. Since the PPP protects the PP, I think the public is getting "P'd" on and protecting profits of the PP.
