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Informal Meeting Minutes Monday, August 29, 2022 9:30 AM BOARD OF SUPERVISORS Maricopa County, Arizona (and the Boards of Directors of the Flood Control District, Library District, Stadium District, Improvement Districts and/or Board of Deposit) "The mission of Maricopa County is to provide regional leadership and fiscally responsible, necessary public services to its residents so they can enjoy living in healthy and safe communities” Board Members Bill Gates, Chairman, District 3 Clint Hickman, Vice Chairman, District 4 Jack Sellers, District 1 Thomas Galvin, District 2 Steve Gallardo, District 5 County Manager Joy Rich Clerk of the Board Juanita Garza Meeting Location Supervisors’ Auditorium 205 W Jefferson, Phoenix, AZ 85003 BOARD OF SUPERVISORS Chairman Gates opened the meeting and asked the Clerk to call the roll. The Board of Supervisors of Maricopa County, Phoenix, Arizona, convened in an Informal Session at 9:30 AM on Monday, August 29, 2022, in the Supervisors’ Auditorium, 205 W Jefferson, Phoenix, AZ 85003, with the following members present: Bill Gates, Chairman, District 3; Clint Hickman, Vice Chairman, District 4; Jack Sellers, Supervisor, District 1; Thomas Galvin, Supervisor, District 2; Steve Gallardo, Supervisor, District 5 (entered late). Also present: Juanita Garza, Clerk; Joy Rich, County Manager; Andrea Cummings, Legal Counsel; Kelly Gardiner, Minutes Coordinator. ACTION 1. RIO VERDE FOOTHILLS DOMESTIC WATER IMPROVEMENT DISTRICT Pursuant to Arizona Revised Statutes Title 48, Chapter 6, Article 1, convene a public hearing to solicit comments and consider the petition to establish the Rio Verde Foothills Domestic Water Improvement District. Supervisory District No. 2 (C-64-23-042-X-00) Chairman Gates thanked everyone for coming to the meeting and clarified the purpose of the meeting which was the public hearing for the Rio Verde Foothills DWID. Chairman Gates established the ground rules for the meeting and said there would be 10 minutes allotted to the speakers in favor and 10 minutes for those in opposition. There would be time for the Board to ask questions or make comments and then those who had not already spoken and had new information to add to the position they represent would have two minutes to speak. Chairman Gates asked the Clerk to report the number of comments received to date by email. She said 129 comment-only in favor; 188 comment-only in opposition and all these comments had been shared with the Board offices. Chairman Gates asked Supervisor Galvin to give a few comments and then for Jen Pokorski, Assistant County Manager, to come forward to give a staff report on this item. Supervisor Galvin thanked everyone who came down to the hearing and said the Board appreciated all the work and passion that citizens have shown during this process. He stated he had learned a lot during his many interactions with the people from the Rio Verde Foothills. Informal Meeting Minutes Monday, August 29, 2022 Page 2 of 8 ~ Supervisor Gallardo entered the meeting ~ Ms. Pokorski gave a brief overview of the timeline and progress of this process. In February 2021, approximately 176 residents from the Rio Verde Foothills submitted a petition to the Superintendent of Streets to form a Domestic Water Improvement District (DWID). The item was heard by the Board and continued several times and since August 18, 2021, the Board and county staff have worked diligently to determine if the Rio Verde Foothills DWID would “serve public convenience, necessity, or welfare” as statute requires of this Improvement District. The proponents have continued to gather signatures and submit them to the Superintendent of Streets who have vetted the petitions for validity of signatories. The number of valid parcels were 559, representing 372 unique owners. Approximately 39% of the parcels were vacant, and approximately 61% of the parcels have improvements. The Arizona Corporation Commission (ACC) has opened a docket to study the water issue in the Rio Verde Foothills area. The ACC requested utilities submit a letter of interest if they were able to provide standpipe service in the area. One of the respondents was EPCOR who would be willing to provide the service with the ACC guidance. Ms. Pokorski said the task for the Board of Supervisors is to determine if, per state statute, the public convenience, necessity, or welfare will be promoted by the establishment of the Rio Verde Foothills DWID, while considering the desires of the proponents and opponents of the DWID. Chairman Gates asked Jeff Crockett, attorney for the proponents of the Rio Verde Foothills DWID, to come to the podium. Mr. Crockett reviewed the needs facing the residents since the City of Scottsdale would be discontinuing access to the standpipe effective January 1, 2023. Mr. Crockett specified the proponents are looking for the following: A long-term source of water (a 100-year source of water); A water supply that would be legally obligated to the properties in the district; Outside water or new water that would be brought into the basin. Mr. Crockett explained an arrangement with Harquahala Valley and how the water would be provided to the proposed district. He said EPCOR does not provide a long-term solution and explained why. He noted the following: DWID members would be voluntary and property owners could join later. A DWID is an option for those who do not have wells and would not impact the current well owners. A DWID is legally viable and there is no other solution at this time. Mr. Crockett asked the Board to consider the following points: There is an eminent crisis. Water will be unavailable from the City of Scottsdale beginning January 1, 2023. The proposed EPCOR solution would have to be approved by the Arizona Corporation Commission. It would involve drilling a well that would take two years to complete. There would also be opposition from current well owners. The DWID is a legally viable solution for anyone wanting to join the DWID. DWIDs operate successfully throughout the State of Arizona. There is 100% consent from the properties that would be included in the DWID. There is no other alternative before the Board at this time and time is running out. Please note the number of opponents who have their own wells. The desires of these landowners should not be given greater weight than those who wish to be included in a DWID. Informal Meeting Minutes Monday, August 29, 2022 Page 3 of 8 Mr. Crockett then addressed some of the criticisms of those in opposition to the formation of the DWID: The DWID will have authority to tax properties even if they do not become a part of the DWID. This is false and the DWID cannot impose taxes on properties that have not been included in the DWID. The DWID will condemn wells on properties. This is not true. While a DWID would have the power of condemnation, the plan is to secure water from an outside water basin. There is no plan to drill a well or acquire a well through condemnation. The concern that the directors of a DWID will have no accountability. The board is elected from the members of the DWID and thus will have direct control over who will oversee the DWID. Mr. Crockett said there is a slate of those to serve on the Board of Directors for the DWID until elections are held with one change to the list to add John Carroll. Lastly, Mr., Crockett stated proponents would ask the name of the DWID be the Rio Verde Foothills Water District. Ted Malone, resident of Rio Verde Foothills, represents the organized opposition to the DWID. He gave an overview on the science of water. He was hoping the community could come together and come up with a solution that would benefit the entire community. He stated Rio Verde Foothills is bounded by three subbasins of two specific aquafers. He explained how Arizona State University (ASU) monitors the changes in groundwater. He said over a 20-year time frame the western aquafer, which is where the Rio Verde Foothills well owners tap in to get water, has risen and the eastern aquafer has remained unchanged. The eastern aquafer is the source of EPCOR’s water. He offered scenarios of the revenue that could be received and questioned the ability to run the DWID on those revenues. Christy Jackman, resident, spoke in opposition to the proposed DWID. She stated her concerns about the wells in the area and believed EPCOR could be a solution for the entire community. She gave examples of issues such as problems with the haulers knowing who to deliver water to and possible billing problems. She expressed concerns the DWID would monopolize the water in an area where over 2,000 homes exist. Ms. Jackman stated if a DWID forms there will be no other alternative for the Rio Verde Foothills area. She said a DWID does not meet the criteria for formation. Karen Nabity, resident, spoke in favor and stated she was a proposed board member for the DWID and has been involved in this effort for the past four years. She reviewed the proposed plan that would include building a fill station which would be completed in 2025. They have a verbal agreement with the City of Scottsdale to use their fill station until the DWID is built. She stated wells are going dry and some of those owners have signed up to be a part of the DWID. She respectfully disagreed that the aquifer is rising. Chairman Gates called on Maryl Hamilton who was not present. Doreen Hornewer, resident, spoke in favor and stated the DWID is providing a guaranteed source of water. She said this equals value. She is part owner of Rio Verde Water and she fills tanks for well owners too. She noted EPCOR has not been granted access to a new water source and this suggests EPCOR may not have confidence they would be able to sustain future water needs. Cody Reim, resident, speaking in opposition to the proposed DWID. He is a hauled water customer and he stated if EPCOR put in a new well, the cost would be minimum compared to the cost of being a part of the DWID. He commented on well depths before hitting water, infrastructure in place, and the time it would take to install a standpipe. He referred to Informal Meeting Minutes Monday, August 29, 2022 Page 4 of 8 comments made by Attorney General Mark Brnovich concerning constitutional consequences from the establishment of a district. Jeff Sager, resident, spoke in opposition to the proposed DWID and noted this was a democratic process. He disagreed with Mr. Crockett’s statement that people opposed to the formation should be given less weight and that is not the democratic way. A democracy gives both sides equal weight. He reiterated that the majority of the people involved are opposed to this formation. He claimed that proponents spoke about some people being unaffected and he stated this was not true. John Hornewer, resident, spoke in favor of the formation of the DWID. He expressed his opinion about the information given about aquifer levels and well levels and said they are not rising. He said residents are trying to save the wells in this area and need a dedicated source of water for the community. He gave his opinion about the consequences of not approving this DWID. Carmela Lizzo, resident, spoke in favor of the DWID. She commented that due to social media, many people have been misinformed and will be without water in 124 days. She gave examples of the misinformation being posted. Richard Schmidt, resident, spoke in opposition to the DWID. He said this item is not supported by the community. He said there are 2,200 properties against the formation and only 500 in favor of it. He said he agrees there is a need for a solution, but a DWID is not the solution. He disputed that there would not be an impact to non-members of the district and he firmly disagreed. He said it would create a monopoly of water in the area. Chairman Gates called on Larry Sobel who was not present. Brent Schlenker, resident, spoke in opposition to the DWID. He stated this problem was not disclosed to him as a home buyer or he would not have bought in the area. He wants to know why the issue of losing water is not being disclosed by realtors in the area. Jaime Phillips, resident, spoke in favor of the DWID. He said this comes down to the “haves” and the “have nots.” He said people do not understand the County is not obligated to provide water to the residents in this area. He stated this is why the laws provide for districts like this. He commented on involving EPCOR as a solution. He said year after year no one has been able to come up with a solution to the problem and year after year, the proposed DWID is still the only solution. John Jouas, resident, spoke in favor of the DWID. He said as a well owner, he is now about 90% dependent on hauled water. He said finding a water solution is most important. He read recent Fannie Mae guidelines that were published August 3, 2022. The guidelines call for all utilities to meet community standards. If the utilities are not provided by a government entity, a private well and facilities must be viable. He said the goal is to have a permanent water source and not just a quick fix. Michelle Guy, resident, spoke in opposition to the DWID. She said those in favor of the DWID will regret the property rights they will have to give up. She stated that Dynamite Water has a standpipe solution. Dynamite Water currently services 50% of the Rio Verde community. She said this solution has been submitted to the Board and the Arizona Corporation Commission in writing. Ms. Guy said this is a long-term comprehensive solution. She explained what she believes to be benefits to the community through Dynamite Water. She said Dynamite Water can be fully operational within two to six months. Informal Meeting Minutes Monday, August 29, 2022 Page 5 of 8 Dave Sloman, resident, spoke in opposition to the DWID. He requested his parcel of land, 219- 37-659A, be removed from the Rio Verde Foothills DWID list. He and his wife have come to the conclusion the DWID is not the best solution for them. Louis Pingtella, resident, spoke in favor of the DWID because he has yet to hear of another long-term, viable solution. He focused on the culpability and liability of the County, builders, realtors, banks, and others. He said there was not one disclaimer, notification, or warning about the water crisis looming in the Rio Verde Foothills. He claimed the County has been negligent by not naming water as a requirement for building a home. Jennifer Simpson, resident, spoke in favor of the DWID. She stated the team has always been ready to hear alternate solutions to this issue. There have been conversations with multiple utility companies over the years and none have come forward with a proposal. She noted there is a water source available on January 1st and there has been no one else that has been able to meet the January 1, 2023 deadline. Brent Naylor, resident, spoke in opposition to the DWID and noted there are parcels on the petition that are vacant properties. This attempt is for a small number of people and not for the entire community. He said it is up to the Board to decide what the best solution was for them. Ray Morris and Stephen Coniaris were both in favor but not available to speak. Debbie Catone, resident, spoke in opposition to the DWID and explained they were told by Morgan Taylor, the builder, that a DWID would be formed and take care of supplying water to the homes. The builder is giving out misinformation and those trying to form a DWID know nothing about public utilities, but EPCOR does. EPCOR needs to be the entity that supplies this area with this basic need. Meredith DeAngelis, resident, spoke in support of the DWID and stated the homebuilder informed her that water would be hauled in from City of Scottsdale and they would never cut them off. She said she was responsible for the press releases that went out informing people of what was going on. She stated her opinion that social media had harmed this community with conflicting information. She said the DWID is the only option for a long-term solution. Elizabeth Schaffer, resident, spoke in favor of the DWID and stressed this was a community in need of water just like other communities in the state. She stated the Board of Supervisors has been soliciting other options for this community for the past 16 months, but there are no other options. She commented that the Gila River adjudication that may prevent EPCOR from ever being a viable option. Amanda Monize, resident, was in opposition but did not wish to speak. Timothy Blattner, resident, spoke in opposition of the DWID and it being noncontiguous. He said realtors do not disclose this issue when selling a home in the area. He stated he is concerned that those who petition for the DWID will encounter costs they are not aware of. Leigh Harris-Avril, resident, spoke in favor of the DWID, allowing the ability to provide a long- term outside source of water for the community. She stated she is a meteorologist and asked Mr. Malone to produce full science documentation he quoted from the Kyle Center and Arizona Department of Water Resources (ADWR). She noted some have tried to drop 1,000-foot wells at a cost of $40,000 to $50,000 and have hit nothing at that depth. She asked the Board to remember 1,000 constituents facing dry taps by the end of this year. Bill Durham, resident, spoke in favor of the DWID based on the research and information given to him. He said the legal requirements for a DWID to be formed have been met. He said this Informal Meeting Minutes Monday, August 29, 2022 Page 6 of 8 problem has been known about for eight years and now the safety of the homes in the area rests with the Board and they need answers about what is going to happen. Mr. Durham also expressed his objections to using a foreign company to provide water. Susan Carroll, resident, spoke in favor of the DWID. ~ Audio for the meeting was lost ~ Chairman Gates read some of the names of people wishing to speak on the item only if necessary or register their position: Colton Ellsworth wished to speak in favor only if necessary. Christian Laursen wished to speak in favor only if necessary. Heidi Wills wished to speak in favor only if necessary. Arthur Kossak wished to speak in favor only if necessary. David Calvano wished to speak in favor only if necessary. Don DuBois wished to speak in favor only if necessary. Sheri and Bruce Novkov were in opposition, comment only. ~ Audio for meeting restored ~ Joe Stock, resident, spoke in favor of the DWID because he is concerned about the wells being drilled and how this will affect his well. He asked the Board to approve the one plan that makes sense for everyone. Chris Johnson, resident, spoke in favor of the DWID because there is not a guarantee that EPCOR will step in. He said if EPCOR does not come through, there will be 700 people without water. He explained why the DWID provides the ideal solution for everyone. Lisa Collins, resident, spoke in opposition of the DWID and expressed her appreciation for all the effort made by all sides. She explained the effort made to keep the Bulletin Board social media neutral. Lisa Kelley, resident, spoke in opposition to the DWID and talked about how the DWID proponents have been strongly pushing for its formation. She said there have been no numbers produced for what this is going to cost, and she is concerned about the ability of the proposed directors to manage the DWID. Mark Zorn, resident, spoke in favor of the DWID and stated when he bought his property, he did not know the ramifications of the water problem. He knows nothing about EPCOR, and they are not present today. He said nothing is in place with EPCOR and there is only 120 days left until he will have no water. Annie Hodgkins, resident, spoke in favor of the DWID and stated she appreciated all the effort made to try and resolve this problem. She said she is in favor of the DWID because it is important to have a local voice in the management of their water source. She said the administrative board will have the resources to aid them in operating the DWID. Mark Moran, resident, spoke in opposition of the DWID and thanked Supervisor Galvin for his engagement on this issue. Mr. Moran stated he has been a resident for three years and moved to a rural area to have less government involvement in their lives. He believes a DWID to be a horrible idea and commented on the lack of transparency the proponents have exhibited. He also said there is a conflict of interest between the proponents and the water haulers living in the community. Informal Meeting Minutes Monday, August 29, 2022 Page 7 of 8 Lisa Wicks, resident, spoke in opposition of the DWID. She has been a resident for three years and is dependent on hauled water. She is concerned the proponents have not provided a business plan. She said there is no transparency, nothing to show what this is going to cost, and nothing to show what experience the board of directors have. Diane Curll, resident, spoke in favor of the DWID. She said she is a 20-year resident and they have been working on this issue for the past four years. She stated she has bought and paid for hauled water for 20 years. She said the DWID has every intention of buying water for people whose wells will go dry. Rex Wager, resident, spoke in opposition of the DWID and talked about buying water rights. Chairman Gates thanked all who appeared, and courtesy shown by everyone. Supervisor Galvin thanked everyone for their civility in an emotional issue. Every time he has met with the parties, he has learned something new. Supervisor Galvin asked Ms. Pokorski if there were any issues that need to be clarified. Ms. Pokorski stated there were just a few mainly concerning the County’s role in regulating water. She said per state statute, the County is not a water regulator or provider. Regarding permits, state statutes do not allow building permits to be denied for lack of water outside subdivisions. Most of Rio Verde Foothills has been developed outside of a subdivision. Supervisor Galvin stated that despite the outcome of the DWID formation, he wanted to work with the residents in the Rio Verde Foothills and around the County and state to see if we can advocate for legislation concerning the disclosure of this type of issue. Supervisor Galvin commented he had heard the term “noncontiguous” used. He asked Ms. Pokorski if there would be an outside boundary designated if the DWID was formed. Ms. Pokorski confirmed this to be correct. Supervisor Galvin stated additional information was received this morning from those petitioning to form the DWID and members of the community in opposition. To ensure this information is carefully reviewed by the Board and taken under advisement. Supervisor Galvin made a motion to continue this item to the August 31, 2022, Formal Meeting, seconded by Supervisor Clint Hickman. Supervisor Hickman congratulated the community for treating each other with respect and civility. He said Rio Verde Foothills has been talked about for many years and he also thanked Supervisor Galvin for getting it to this point in eight months. Ayes: Bill Gates, Clint Hickman, Jack Sellers, Thomas Galvin, Steve Gallardo 2. EXECUTIVE SESSION Vote to convene in Executive Session to consider the items on the Executive Agenda dated Monday, August 29, 2022, for Board of Supervisors and relevant Special Districts pursuant to the statutory authority listed for each item. Motion to approve by Supervisor Clint Hickman, seconded by Supervisor Thomas Galvin Ayes: Bill Gates, Clint Hickman, Jack Sellers, Thomas Galvin, Steve Gallardo MEETING ADJOURNED After discussion on the Executive Session items and there being no further business to come before the Board, the meeting was adjourned. Informal Meeting Minutes Monday, August 29, 2022 Page 8 of 8 ___________________________ Bill Gates, Chairman of the Board ATTEST: ____________________________ Juanita Garza, Clerk of the Board