PHOENIX — The town of Queen Creek wants to be appointed interim manager of Johnson Utilities.
That much was clear as Queen Creek officials testified in the Arizona Corporation Commission evidentiary hearing for Johnson Utilities, whose officials were called to the stand by the attorney representing Queen Creek and Florence, Albert Acken.
“I would object to this becoming a presentation by the town of Queen Creek about why it should become the interim manager,” Johnson Utilities attorney Jeffrey Crockett said.
Despite Crockett’s repeated attempts to derail the line of questioning, Acken and the witnesses took every opportunity to position the town of Queen Creek as an ideal interim manager.
Other parties and the judge at the hearing were initially skeptical that this was about to turn into a Queen Creek public relations spiel. But the town also provided some of the most technical and damning testimony of the hearing.
Town Manager John Kross, and especially Utilities Director Paul Gardner, provided testimony that strongly criticized Johnson Utilities’ management and infrastructure. They backed this up with their technical expertise in running the Queen Creek water utility and their intimate knowledge of Johnson Utilities’ operations that came from their review of it when they had considered acquiring the utility.
Unlike Arizona Department of Environmental Quality officials earlier in the hearing, Gardner pulled no punches and provided his full opinion on the matter, blasting the utility for failing to properly use its ample funds to maintain its infrastructure, leading to water pressure, quality, odor, raw sewage spills and hydrogen sulfide gas violations. He was not afraid to tie these failures directly to managerial decisions.
According to the testimonies, after being approached by Brad Cole and then completing an analysis, Queen Creek ultimately decided not to buy the utility after realizing that the infrastructure needed between $160 million and $190 million in improvements, which Kross deemed excessive for the size of the system because it failed to meet overall municipal standards and that it failed to meet significant safety standards.
Gardner criticized the company for not diverting more funds to maintaining infrastructure. Almost 50 percent of rates gets diverted to management, personnel and as many as 11 companies associated with the utility, like Hunt Management.
“I believe there were management practices, prior to the management sitting at the table, decisions were made to end up with multiple sewer systems that were reliant on lift stations,” Gardner said, arguing that the raw sewage overflows, which he deemed as excessive for a utility of that size, and hydrogen sulfide gas issues are directly related to this flawed design.
“There were subsidiaries like Hunt Management that were contracted to put in a lot of the facilities, and it was of benefit to those entities to be able to put those in at a lower cost.” Gardner added that “someone is making a lot of money off of management fees” and agreeing that this came at the expense of customers. “If we got 10 to 15 percent (at the Queen Creek utility) we would think we were making hay.”
Gardner said that such practices lead to a sewer system that is somewhere between a Class B system and that of a third world country.
Gardner also railed against the Section 11 plant, which has been the site of so many hydrogen sulfide gas violations and complaints of odor and symptoms of hydrogen sulfide poisoning from residents.
“How Section 11 got approved by anybody I do not know,” said Gardner, who described it as antiquated and out of the 1950s. He said that the company should have either built something different or the homes should have been built much farther away.
To fix the situation, “you’d shut it down, send the effluent elsewhere, and you’d build a real plant,” Gardner said, noting that it was on the top of the list of things to do if Queen Creek were to acquire the plant.
He also expressed concern that due to years of poor maintenance and a lack of foresight in planning for growth, the utility would not be able to handle demand during this summer’s peak days, tying the lack of capacity to below industry-standard water pressure and citizen reports of brown water.
“They are well behind the curve,” Gardner said. “You have a decade where not a lot has been done and this horse has been run into the ground.”