PHOENIX — Johnson Utilities is aggressively litigating to keep under wraps documents held by Queen Creek while the town has said it believes they are public record.
Arizona Corporation Commissioner Andy Tobin has been seeking to obtain both correspondences between Johnson Utilities and Queen Creek and a report by Carollo Engineers and Willdan & Associates commissioned by Queen Creek.
The reports and communications allegedly contain information that demonstrates what Queen Creek official Paul Gardner described as profound deficiencies in Johnson Utilities infrastructure that would need $160 million to get up to municipal standards.
They also provide a detailed record of the company’s finances, which have been a mystery during the ACC’s hearing. Company officials say they can”t account for $15 million of the utility’s revenue that is diverted annually to Ultra Management, a subsidiary owned by Chris Johnson. Both Chris and his father George, owner of Johnson Utilities, told the board they couldn’t explain what the subsidiary does, why it exists, who created it or where all the money goes.
Only a few Queen Creek officials know what the documents contain, and Johnson Utilities is doing everything it can to keep it that way.
In a letter filed in the evidentiary hearing docket by Tobin, the commissioner details the legal battle he has been in during an attempt to obtain the records. Tobin issued a subpoena to Queen Creek on March 8, which began delivering the requested documents on April 5.
The following day, Johnson Utilities sued the town of Queen Creek. On April 9, Judge Randall Warner of Maricopa County Superior Court issued an order that the town of Queen Creek shall not produce the requested records until after a temporary restraining order hearing.
On April 12, Warner denied Johnson Utilities’ application for a temporary restraining order, preliminary injunction and permanent injunction and ruled that the documents were public record. However, Warner did issue a temporary restraining order long enough to give Johnson Utilities the opportunity to seek relief from the Arizona Court of Appeals. That was to expire on April 19. On April 17, the utility filed an emergency stay motion.
“Incredibly, the Court of Appeals issued an order the following day staying the expiration of the temporary restraining order,” Tobin wrote. “It is my understanding that the commission was not served with Johnson Utilities’ emergency motion and was not even aware that it had been filed.”
This means that the commission lost the opportunity to make its case in the Court of Appeals and advocate for its interest in the release of the documents.
“There is no end in sight as to when I will finally obtain access to these public records which the town of Queen Creek does not object to producing,” Tobin writes.
“The commission has honored the spirit of due process in these proceedings; however, Johnson Utilities continues to block the commission’s access to documents which, in my opinion, are critical to ensuring the commission has all the information and evidence necessary to make an informed decision. It is perplexing to me that Johnson Utilities thinks financial information about its regulated water and wastewater operations should be kept hidden from the commission.”
Queen Creek stated its position that the reports are not subject to the stay and are public record, but utility representatives disputed this claim, requesting that the town return or permanently delete all materials.
During the hearing Friday, Brad Cole was asked by ACC staff why the utility filed the stay, and Johnson Utilities attorney Jeffrey Crockett objected. No answer was provided.
Queen Creek Town Attorney Scott Holcomb responded to Johnson Utilities’ request to delete the materials by saying that the town is not required to nor will it violate its statutory duties under Arizona public records laws to preserve public records within its control.
Tobin concluded his letter by expressing his grave concern over the matter.
“I am deeply concerned that, if the allegations are true regarding Johnson Utilities’ operations, further withholding of relevant evidence and the resulting delay of the Johnson Utilities proceedings will potentially present life safety issues to the citizens of Pinal County.”