3/4/2010 5:22:00 PM Rimrock well mired in regulatory mess Corporation Commission decision puts well in violation
VVN/Steve Ayers A long list of regulatory violations, followed by a ruling this week from the Arizona Corporation Commission, are limiting the options of the Montezuma Rimrock Water Company to bring their beleaguered and arsenic-tainted system in line with federal standards.
RIMROCK - The Montezuma Rimrock Water Company, owner of a proposed commercial well outside the gates of Montezuma Well National Monument, was dealt another setback on Tuesday when the Arizona Corporation Commission refused to extend a deadline for its arsenic abatement project.
The company has been in violation of federal arsenic standards since Jan. 23, 2006, the initial deadline imposed by the Environmental Protection Agency for water providers nationwide.
On Dec. 17, 2008, the Arizona Department of Environmental Quality issued MRWC a Notice of Violation for distributing water over the maximum allowable level of arsenic.
A Notice of Violation is an informal tool used by ADEQ to inform companies or governmental agencies that ADEQ believes a problem exists.
According to previous statements issued by MRWC, their original plan to install reverse osmosis systems in every home in their service area was scrapped due to the increase in the number of residences being served by the system.
The company instead proposed the construction of a centralized arsenic treatment system, which required, along with the unit that treats the water, an additional well.
It is that well that has drawn criticism from area residents because of its depth, pumping capacity and proximity to the national monument.
In October 2009 MRWC received approval from the Arizona Corporation Commission for a rate adjustment to cover the costs of an arsenic treatment system. They also received approval to incur debt in the form of a low-interest loan from the state's Water Infrastructure Finance Authority.
As part of the commission's approval, the company was given until April 30, 2010 to receive an Approval of Constriction from ADEQ, a document that effectively state's the company has an arsenic system built to standards, in place and ready to operate.
On Oct. 21, 2009, after failing to adequately address the informal Notice of Violation, MRWC received a Consent Order, a more formal demand from ADEQ that the company set a timetable for compliance with arsenic standards.
MRWC has refused to sign the consent order, stating through their attorney that ADEQ's demand that they provide an alternate source of water drinking water is an "extremely onerous obligation" and "would cripple [MRWC] financially."
In response, Vivian Burns, enforcement manager for ADEQ, notified owner Patricia Olsen that the company had almost nine years to comply with arsenic standards and that the demand for an alternate source of drinking water would stay in place.
In December 2009, Olsen received approval from WIFA for a $165,000 loan. However, in February 2010, WIFA suspended approval of the loan after a citizen complaint raised questions about the well's impact on nearby Montezuma Well and the Beaver Creek riparian area.
WIFA is now requiring that MRWC first provide an Environmental Information Document (EID), a report outlining what effects if any the arsenic project, including the well, would have on the surrounding environment.
The information needed to back up the EID may require a costly and time-consuming study, which in light of the latest regulatory move by ADEQ will, make matters more difficult for MRWC.
Last Friday, ADEQ issued the water company a Compliance Order. Compliance Orders demand specific things be done within a specific timeframe, or the violator could face administrative fines.
If MRWC doesn't appeal the order, the timetable for compliance will begin on March 28.
Among the demands are that MRWC begin providing drinking water to their customers, within 10 days, in the form of bottled water or "other methods."
Within 15 days they must also apply for a permit to construct the arsenic system, and within 30 days after receiving that Approval to Construct, they must apply for an Approval of Construction, the same document the Corporation Commission wanted by April 30.
At the Corporation Commission hearing on Tuesday, MRWC asked for an extension of their deadline for providing the Approval of Construction permit to the commission.
Instead, exasperated commissioners did just the opposite -- they rolled the deadline back to last December, effectively placing MRWC in immediate violation of the commission's order issued in October.
The Commissioners also told Olsen they were not interested in allowing her to seek private financing for the project, which would have allowed MRWC to avoid the environmental assessment required by WIFA, and, in the long run, cost rate payers more for the higher interest loan.
The commission's order sets the stage for several possible sanctions against the company, perhaps the most severe being the removal of the current company management, or forcing the sale of the company's assets.
Before Olsen purchased the company in July 2005, the staff of the Corporation Commission, after reviewing her financial assets and considering the need for immediate and expensive arsenic abatement, recommended selling the water system to the Arizona Water Company.
According to Corporation Commission spokesperson Rebecca Wilder, it will now be up to the commission staff to make further recommendations on the company's fate. No date has been set for those recommendations to go before the commission.
Reader Comments
Posted: Friday, March 12, 2010
Article comment by:
Rob Estrada
As a resident of Montezuma Estates in Rimrock, I am concerned about our community having enough water for fire containment. With the extreme precipitation this year, we can expect a greater than usual risk for fire due to the dense under brush. My home is on the hill of the Old Rimrock Ranch so this is of great concern to me. The residents complaining about the additional well own their own wells on their properties. However, 213 homes in our area of Rimrock do not have their own wells and must get their water from MRWC. I have asked many questions of the complaining parties about time lines and alternatives for existing residents, but have not received any clear cut answers. This Summer and Fall we will be facing a serious fire threat. If MRWC loses it's permit, how long will it take for us to get adequate water supplies? How will this affect the cots to current residents? Many of which are elderly people on fixed incomes. If this community is a threat to the health of the Montezuma Well National Monument, then why was construction allowed next door to a National Monument in the first place? Let's find a solution, but not at the expense of current residents whom do not own their own wells out of no fault of their own.
Posted: Tuesday, March 09, 2010
Article comment by:
John Doe
I have personally dealt multiple times with MRWC and their harrassing ways. They certainly did not earn my trust despite the efforts of the owner.
Posted: Friday, March 05, 2010
Article comment by:
John Dougherty
Great story, Steve,
The Montezuma Rimrock Water Company appears on the verge of financial collapse.
Without the WIFA loan, it cannot build the arsenic treatment facility in the immediate future -- which both ADEQ and the Corporation Commission are now demanding.
The Corporation Commission has also slammed the door on the company's last minute request to obtain private financing to skirt environmental studies needed to obtain the WIFA financing.
And ADEQ is finally demanding immediate compliance with Arsenic treatment standards with its Feb. 26 Compliance Order.
Yavapai County Supervisors should especially take note of this regulatory mess. The company is seeking a Use Permit to activate the well that was drilled in the middle of a residential neighborhood.
The company should have sought the zoning variance and Use Permit in 2006 when it drilled the well, but instead tried to slip it under the radar. But the company got caught.
This well should never be activated for commercial purposes. It not only diminishes the property values of immediate neighbors, it also poses a significant threat to Montezuma Well National Monument.
Despite the company's fear tactics and rumor mill, residents of Montezuma Estates will continue to have drinking water, whether or not the current owner remains in control of the company.
If the Corporation Commission orders the sale of the company, the likely buyer would be the Arizona Water Company.
AWC has a 12-inch pipeline within 2,000 feet of MRWC. AWC already has arsenic free water, and has lower rates than MRWC.
Montezuma Rimrock Water Company has had years to meet state and federal drinking water standards and has failed to do so.
A series of poor decisions apparently made to skirt county ordinances and state and federal regulations has finally caught up to the company.
Supervisors can put an end to this gross mismanagement and failure to provide safe drinking water by rejecting the company's request for a Use Permit at the upcoming March 15 Board of Supervisors meeting in Cottonwood.
