Lawsuit factor in future water rates

An appeal of a lawsuit filed by the Job's Peak Homeowners Association is being held pending approval of the county's water rates.

The homeowners won a lawsuit claiming that the county failed to adequately give notice a rate increase last year. But another part of the lawsuit that challenged the development agreement between the county and the project developer was rejected by Judge Michael Gibbons, who said the statute of limitations had passed.

Job's Peak homeowners' attorney Kelly Chase said the appeal of Gibbons' ruling has been stayed pending the interim rates and further discussion with the county.

"We had to go to the settlement conference, which the Supreme Court requires," Chase said. "We've stopped proceedings pending what the county's agreed to do. We're going to acquiesce to the interim rates, with an eye toward consolidation."

Job's Peak residents received a $182,000 subsidy on Thursday, emptying the county's 210 fund, which lowered their water rates to $262 a month, the same rate as Cave Rock, and the highest rate the county charges.

Chase said homeowners will wait until the next budget cycle to see if consolidation comes back before moving ahead with the appeal.

Jobs Peak, Sheridan Acres and Sunrise Estates-Fairgrounds water systems would benefit from the consolidation of Valley water systems' bookkeeping. Those systems serve 181 customers between them.

All three have relatively few customers and very expensive improvements they would have to subsidize.

Without some form of consolidation, customers in the three systems would have to pay rates ranging from $207 in Sheridan Acres to nearly $600 in Jobs Peak. Residents of Sunrise Estates learned last week that their monthly bills could quadruple by 2014 without help from the county or some sort of consolidation.

The difference would be paid by customers in the east and west valley water systems, some of whom protested rate increases. Those two water systems serve nearly 2,000 customers.

Chase said the water rates will continue to be an issue next year.

"In the interim, we can work through this thing and get the problem solved, so it is somewhat acceptable to the people up there," he said. "They're just like anyone in the Valley who has worked hard all their lives and have to manage on a fixed income. They have the same problems that anybody else does this. They're asking 'why are we paying for this when it is a county problem.'"

Chase said the appeal asks whether the residents who live in a development have any say in the agreement with the county.

"The agreement that started the whole project said the developer had to either construct an adequate system or bond for it to be done," he said. "When the county accepted it they did away with the requirement. It was well known for two months before they accepted dedication that there was a problem. The county engineer told them not to approve any more development. Do the homeowners have any standing to enforce the development agreement? We believe that it was still in play. Does the recorded development agreement give any rights to the people who purchased property subject to the agreement?"

Chase filed the lawsuit on behalf of the homeowners' association in November in response to the Aug. 6, 2009, rate increase.

Gibbons ruled Feb. 2 that the notice for the rate increase was not sufficient and threw it out.

Gibbons also rejected an attempt to reverse the development agreement between the county and the developer.

According to the suit, the county entered into an agreement with the developer providing for the construction of a water system in accordance with county standards or provide a bond for the costs to fix it.

The developer informed homeowners in 2004 that the water system did not meet federal or state water standards for water quality.

On Sept. 8, 2005, the county engineer advised commissioners not to approve any final maps for the project until the water system was fixed. On Dec. 15, 2005, the county agreed to accept dedication of the water system as-is, without warranty and with full knowledge of the system's deficiencies, the lawsuit claims.