December 13, 2006

by Reb Yudel
Arizona American Water Company silences citizens

Rather far afield from this blog's usuals concerns... but since this cropped up in my news feeds, I don't want it to go unnoticed.

Sean Tierney describes how he and his fellow citizens who tried, unsuccessfully, to prevent the Arizona American Water Company from building arsenic storage tanks in his back yard are now being silenced:

’m now staring at a settlement agreement that’s been signed by everyone else in the neighborhood. It essentially says “You agree to take down the site and never speak of the incident again. You also indemnify us from the inevitable relative loss of property values that you will experience. In exchange we agree not to sue you.” They’ve had a year and half to sue us for slander now but never have. If anything we’ve said so far on the site was false they could have sued us many times already… This is a disturbing maneuver to coerce everyone into silence. And unfortunately it has achieved its purpose- all plaintiffs from the lawsuit have signed it. This ordeal has nearly bankrupted some people and I don’t blame them one bit for signing - we don’t all have the budgets of a large utility company to finance our battles. Not everyone has the option to do what’s right in this situation. Signing this is simply twelve shades of wrong and I feel sick to my stomach that I’m caving in to these guys.

I wonder how much of the web site (you can find it on the Wayback Machine) is actionable, even if false. For example, here's what's on the site's home page:
We are a group of concerned citizens who reside in four housing areas affected by the proposed construction of two gargantuan side-by-side above-ground water reservoirs by the Arizona American Water Company in beautiful Scottsdale, Arizona. It is our intent to educate the public on some disturbing issues regarding this construction project.

This issue is not related to the water treatment plant construction on the corner of Hayden and McDonald in Scottsdale.

The Arsenic Removal Treatment Facility at issue will be located in the Cattletrack neighborhood area, north of McDonald on Miller Road. These proposed reservoirs are not a necessary part of the Arsenic Removal Process. We recognize the necessity to comply with new EPA guidelines for safer drinking water and our residents are NOT opposed to construction of the Facility! The arsenic can be reduced from our drinking water as requested by the EPA without actually building these reservoirs! Arizona American Water Company has lumped the construction of these reservoirs in with the Facility build-out for financial reasons.

It is our hope to raise sufficient citizen awareness and apply essential political pressure to get Arizona American Water Company to partially bury the reservoirs and bring them to a height that is consistent with the renderings originally presented to our residents. This outcome will maintain the beauty of our neighborhood and the scenic canal-greenbelt area as well as send a message to land developers and City representatives that they must respect the neighborhoods and honor their promises to our citizens.

We appreciate your interest in our effort to maintain the beauty of Scottsdale for all to enjoy.

I suppose that's claiming that the utility -- gasp! -- is not being forthright about its motives. I find that that would be hard to rise to the level of libel. Let's see if there is anything potentially libelous in the "background" page:

The road for our residents has not been an easy one thus far.

Read on...

On August 5, 2004, the Arizona American Water Company ("AAWC") sponsored an Open House event specific to future construction of the Paradise Valley Arsenic Removal Facility ("The Facility"). Residents from Cattletrack, Casa Del Mar and the Colony at Scottsdale were in attendance. At that meeting, AAWC presented renderings of The Facility as well as proposed height, width and placement of the finished water retention reservoirs. These reservoirs were represented as a total height of twenty-two feet, recessed twelve feet into the ground with ten feet protruding above ground. Renderings indicated that the finished reservoirs would be visible two feet above the eight-foot retaining wall on the property. At that time, residents concerned with the ten-foot height of the reservoirs queried AAWC as to the possibility that the reservoirs could be further recessed into the ground. AAWC explained that this could be accomplished.

Shortly thereafter, the City Council approved zoning of land parcel 6237 Cattletrack-Miller Road in Scottsdale for this project based upon existent use of the land in that area. The original parcel was designated as Special Use-Historical Campus land but approval was provided to the AAWC to erect a portion of their facility on it. This was the proposed site for construction of the reservoirs, however no reservoirs had ever existed on that parcel of land in the past. At that time, there was no discussion as to the height or width of the reservoirs. Further, there was no public input as to the zoning process at that time.

From September 2004 to late October 2004, Technical Solutions (owned by Susan Bitter Smith and her husband Paul Smith), third party consultant contracted by AAWC to conduct necessary neighborhood diligence, allegedly canvassed neighborhoods within a 750-foot radius (as established by AAWC) of the proposed site of The Facility. During this diligence process, Technical Solutions representatives presented residents with literature concerning proposed Facility specifications and showed residents renderings indicating the height of the proposed reservoirs two feet above the eight-foot retention wall. Technical Solutions stated that they obtained approval from neighbors in the affected areas for construction of The Facility. Residents who were contacted by Technical Solutions and who approved of said construction by executing their petition were not provided with any information that they could retain and review. Technical Solutions states that it obtained approximately 50 signatures (of the affected 250 residents) of those who approved the construction of The Facility prior to the end of their diligence process in October. Technical Solutions contacted limited Cattletrack residents in mid-December, after their report had been completed and submitted to AAWC, and showed them amended renderings of the reservoirs, indicating their finished height of twenty-two feet ABOVE GROUND. Technical Solutions primarily focused on residents in the Cattletrack area and after mid-October, residents east of the canal did not recall speaking with these representatives.

On January 11, 2005, the Scottsdale City Council approved a conditional use permit for AAWC to construct two 1.5 million gallon reservoirs and several industrial water treatment buildings at 6195-6237 Cattletrack-Miller Road in Scottsdale. These reservoirs were approved at 28 feet in height and 107 feet in diameter each. Proposed reservoir height will exceed that of the existent vegetation with combined widths comparable to 3/4 of a football field! The reservoirs would be enclosed by an eight-foot retaining wall surrounding the property and built on the property line separating Cattletrack residents and businesses from AAWC property. Prior to their approval of the conditional use permit, the City Council reviewed a Development Review Project Narrative provided by AAWC which indicated that the necessary line of site studies had been conducted and the "finished water storage reservoirs...would not be visible from Cattletrack or east of the Arizona Canal."

The City Council reviewed the following language from the Development Review Project Narrative prior to granting the conditional use permit: “This is a request for a conditional use permit to place an arsenic treatment facility…at the existing AAWC’s existing water well site. The purpose of the arsenic treatment facility is to comply with the Federal Government’s arsenic reduction requirements and new safe drinking water standards.” The conditional use permit was based on arsenic removal, and not designated, on its face, for other uses. The reservoirs, which are mentioned as part of this permit, are being used to accommodate water pressure interests for the Town of Paradise Valley residents. The sole purpose of Facility construction is to lower arsenic levels in the water for approximately 4,600 Paradise Valley and Scottsdale customers.

On January 13, 2005, affected residents in two of the four areas attended a Historical Review meeting and objected to placement, height and width of the reservoirs as approved by the City Council on January 11, 2005. The Historical Review Board stated that it was not within the purview of their authority to amend the height of the reservoirs. The extent of their authority, as explained by the Historical Review Board, was to consider aesthetic appearance of the reservoirs solely from the Cattletrack area. Shortly thereafter, residents of these affected areas obtained more than sixty signatures from homeowners who opposed erection of the reservoirs at the newly presented and City Council approved height, width and location.

On January 24, 2005, the City Clerk began receiving Notice of Appeals letters from concerned residents regarding this matter. To date, the City office has not responded to any of these letters. Prior to and following that date, Mayor Mary Manross as well as City Council members, City project planners and AAWC received numerous telephone calls, electronic mail and facsimiles from concerned residents. Very few transmissions were subject to response.

At the January 25, 2005 City Council meeting, a notation was made to include reconsideration of the condition use permit on the agenda as a special agenda item. Because of its last minute placement, Mayor Manross limited feedback concerning this reconsideration to five minutes with one speaker representing each group of individuals present. Prior notice of said meeting agenda item was never provided to residents of the affected areas for this project. It is our understanding that counsel for AAWC was notified in advance of placement of this agenda item and reconsideration of same, providing him with ample time to assemble an impressive dog-and-pony show. Residents elected one person to speak on their behalf and the City Council provided only five minutes for this resident to voice concerns regarding height and placement of the reservoirs. The resident elect, who was given ten minutes to prepare to speak, presented new information regarding nuisance, inaccuracies in information utilized as a basis for decision of the conditional use permit, obstruction of views from east of the Arizona Canal, visibility of the reservoirs from the Cattletrack area, and resultant property value damages, to the City Council. Counsel for AAWC was provided with more than nine minutes to speak and presented no new information specific to this project. Contrary to information provided by residents, the City Council voted against reconsideration of the conditional use permit.

On January 27, 2005, five neighborhood residents spoke out against height and placement of the reservoirs at the Development Review Board meeting. Residents specifically called to light inaccuracies in the legislative and administrative process which preceded decision by City Council to approve the conditional use permit as well as issues concerning obstruction of views from east of the Arizona Canal. Further, residents pointed out inaccuracies in diligence processes and documentation upon which City Council relied when making same decision.

Stipulation was made to lower the reservoirs from twenty-eight feet to twenty-two feet (really, it's 22 feet in height PLUS an extra 2 feet at the base, making it 24 feet total!) but to maintain their placement on the same parcel of land. It was presented to and acknowledged by the Development Review Board, that heights of over ten feet will obstruct views from residential parcels east of the Arizona Canal and that the reservoirs will be observed by residents both east and west of the canal. It was also noted that a site line study conducted from parcels of land on the east side of the Arizona Canal was flawed. The inaccuracy of same was relied upon when City Council approved of the conditional use permit. The Development Review Board refused to consider lowering the reservoirs into the ground as originally designed and presented by AAWC in August 2005 and as presented by Technical Solutions as part of the diligence process through October 2005. Instead, the Board approved the new height of the reservoirs subject to two pages of stipulations to be completed by AAWC and reviewed by the Board at their next meeting.

On Saturday, February 5, 2005 concerned residents protested construction of the tanks in the affected neighborhood areas. During a four hours period of time, residents distributed nearly 100 flyers, marched up and down McDonald carrying large protest signs, fielded questions from concerned homeowners in this area. They learned that many residents never heard from Technical Solutions or AAWC during the diligence process, nor were they notified of planning meetings. While these residents may have been "out of the 750 foot affected area" as established by AAWC, they learned today that if property values dip in the affected residential areas, then because of their close association, their property values will dip as well. They were not pleased to say the least. At no time were they aware of the placement of the reservoirs so close to their homes.

On February 18, 2005 one representative from Cattletrack and another from east of the Arizona Canal along with their attorney met with Deputy City Manager Ed Gawf, Assistant City Attorney Donna Bronski, Chief Planner Randy Grant and Project Manager Kurt Jones concerning this matter. At issue were inaccuracies in the zoning decisions, missing site line studies as well as other administrative decisions made by the City Council during the project planning and approval process. Randy Grant defended the City’s position that the zoning parameters were sufficient for the two acres of land known as SC-HP (Special Campus Historical Preservation) where the reservoirs will be placed because they were considered an extension of “continual non-conforming use” of that land. Neighborhood representatives argued that there are not now and never have been water purification, water reservoirs or treatment facilities on that land. Additionally, on one parcel, the most southern piece of land, there isn’t even a well or piping on it. A non-conforming use is inaccurate for this land. Randy further stated that since there was no actual “zoning ordinance” that was applicable for this project, they substituted an ordinance number for zoning…the section applicable to ADULT BOOK STORE USAGE. It is obvious that this is even a stretch for the City but that apparently, calling a special campus historical preservation wildlife area of land correctly zoned for adult bookstore usage left us shaking our heads! How much more bizarre could this get?

During that same meeting, it was learned, firsthand, from Kurt Jones, that no east or west site lines studies were EVER conducted by AAWC or the City prior to the Project Narrative, dated 12/13/04 being published. Recall, this is the same Narrative that was provided to the City Council as attachment #1 to their Conditional Use Permit package and was relied upon during the decision making process. Kurt then further stated that he’d “looked over the fence of one of our east side residents and didn’t see a problem with the position of the tanks”. So in actuality, AAWC lied to the public (this document was published as part of information to the public on the City of Scottsdale website) and the City Council in order to get the Use Permit passed.

On February 25, 2005 we again met with Deputy City Manager, Ed Gawf and AAWC Chief Engineer, Joe Gross who, until September 2004, was employed by the City of Scottsdale and responsible for water treatment facilities and other water-use related construction. Neighborhood representatives were without counsel at that meeting, but presented questions to Mr. Gross regarding the Soils Report, commissioned by AAWC in August as part of this project. Mr. Gross stated that he’d never seen the report and could not comment on it. Further, representatives inquired about the missing site line studies, which were mentioned in the December 13th Narrative by AAWC and again, Mr. Gross stated that he’d never seen that document. Finally, when queried regarding the fact that AAWC intended to build these reservoirs on a Zone A Floodplain which was initially addressed in the Soils Report as a safety concern and also noted in both City and County documentation as an unlikely place for such construction, Mr. Gross stated that he’d personally built the Indian Bend Wash and that it had taken care of the Zone A Floodplain issues in the Cattletrack area. When residents produced actual documentation to Mr. Gross from the City and County noting the Zone A status of the land, Mr. Gross said that there must be some mistake. Mr. Gross, there’s no mistake.

Mr. Gross seemed concerned that AAWC had placed information in a Narrative that stated the reservoirs would not be seen from east or west of the Arizona Canal, so he asked to go to the home of one of the east side residents after the meeting and look at the view from her perspective. Mr. Gross, the Cattletrack representative and the east side resident all stood on her back patio and looked out at the proposed location of the reservoirs. At that time, Mr. Gross stated that YES she will see the reservoirs from her backyard as would the other residents east of the Arizona Canal. He also commented to both residents that if that was, indeed, a Zone A Floodplain, AAWC could not build the above-ground reservoirs on that land.

We attempted to schedule a third meeting with AAWC and City of Scottsdale personnel to resolve this issue and to get our multitude of questions answered, but they never returned our calls or e-mail transmissions.

On March 8th, the City of Scottsdale was served with a Notice of Claim which called to light all of the administrative inaccuracies during the decision making process for this project. On March 10th Zoning Administrator Kroy Ekblaw was served with a Zoning Appeal letter, which explained all of the zoning errors for this project. This documentation is available on our website for your review.

We learned that on February 15, 2005 AAWC was granted the right to apply to the Arizona Corporation Commission (“ACC”) for a rate increase based on an arsenic cost recovery mechanism. Originally, ACC had given AAWC a three-year moratorium on rate increases, yet this request was made in light of that mandate by ACC. On March 23rd, we sent correspondence to an attorney for the Residential Utility Consumer Office (“RUCO”) and also the ACC to alert them as to our issues regarding the water reservoirs. We received a prompt response from both agencies. RUCO’s attorney stated that when the issue reaches ACC's docket, that it would be closely scrutinized, as there have been problems with submissions by AAWC in the past with regard to rate increases. He further stated that water reservoirs are NOT part of the arsenic removal process and will not be considered in the total cost when the rate increase request is made by AAWC. Mr. Gross from AAWC confirmed that the reservoirs are not a necessary part of removing the arsenic from the water for this project.

On April 15th, we received a denial of our appeal from Assistant City Attorney Sherry Scott. Ms Scott stated that the Zoning Administrator had not issued any decisions regarding zoning for this project and therefore, our appeal could not be processed. Her correspondence can be viewed under the Latest Developments Section along with a commentary and supportive documentation outlining zoning errors.

In early April, we served AAWC with a demand letter requesting that they bury the reservoirs as they had originally intended to do and as they had promised residents during the planning and diligence processes. As is with true lawyer like fashion, AAWC’s attorney denied all allegations as set forth in the correspondence, skirted around the important questions, and inundated us with a barrage of publicly attainable documentation for this project. One piece of information, however, stood out in the pile of paper they provided: it was the missing site line study. As you may recall, this is the study upon which AAWC’s Narrative statement that, residents east and west of the Arizona Canal will not see the reservoirs, was based. AAWC’s attorney stated in his correspondence to our residents, that their views would be virtually unchanged when the finished above-ground reservoirs are completed. The site line study is seriously inaccurate and our reasons for same can be found, along with the study, under Latest Developments section. City Council never had benefit of this site line study during their decision making process.

Recently, we received word that the City of Scottsdale has chosen not to answer our Notice of Claim. This begs the question…what do they have to hide? City Manager Jan Dolan has been in contact with our coalition members and stated that the City “bears no liability in this matter” however, it “wants” to help the residents by putting pressure on AAWC to bury the reservoirs. Of course, the City also explained that it is under no obligation to actually see to it that the reservoirs ARE buried.

During the week of May 2nd, our coalition group issued a mass mailing to more than 300 residents in the immediate affected area of this project and some outlying areas, which will likely suffer a trickle down property value loss when construction is concluded. It is our understanding that numerous calls were placed and emails and faxes were sent from angry residents both to the City of Scottsdale and AAWC executives. It should be obvious to the City of Scottsdale and AAWC, from the number of residents who have signed our petition and contacted these entities concerning this project, that citizen review was improperly conducted and that residents were mislead as to details of the reservoirs.

Additionally, packages containing the bogus flawed site line study, soils report, zoning related documentation, conversations presented to City Council by John Berry, attorney for AAWC and other pertinent information was forwarded to American Water President (NJ), Vice President (NJ), Senior Vice President of External Affairs(NJ), the entire Scottsdale City Council the Mayor, and the City Staff. This information qualifies the critical errors which occurred during the decision-making and citizen review processes. On May 11th American Water President Jeremy Pelczer issued an email to one of our members stating that he has requested a full investigation of this matter by AAWC executives here in Arizona and will report back to us with the results. Apparently, Mr. Pelczer has been kept in the dark concerning this matter from the onset. We finally have corporate’s ear in New Jersey.

We’ve also contacted RUCO and ACC concerning AAWC’s recent sale of land south of McDonald, adjacent to their existent water treatment facility and their intent to sell the northern most parcel of land (three and one half acres) to a private developer, both for profit. According to RUCO and the ACC, AAWC is required to offset their costs by their profits acquired during the sale of land pertaining to this project. The most recent sale of land on south McDonald was more than a seven-acre parcel, which AAWC rezoned to make it more attractive, then sold to a private developer for a hefty profit.

In essence what this means is that, hypothetically speaking, if AAWC were to sell that southern parcel for $10,000,000 and the arsenic facility build out will cost them $15,000,000, then they would be required to offset their building costs by the profits realized and pass that savings on to the customer. Otherwise AAWC would pocket the profit, then turn around and charge their own customers full ride cost of the project through a rate increase over a certain number of years. RUCO and ACC are now on notice of the recent sale of land and the pending sale of land in the north Cattletrack area. This should prevent AAWC from making a profit at the customer’s expense. AAWC states that their requirement to reduce costs by profits realized is “hearsay”. RUCO and ACC say it is not.

AAWC’s business cards, carried by each of their employees, read “Our Vision: To be your trusted water resource company, dedicated to delivering innovative solutions.” If that were true then they wouldn’t be seeking out the cheapest, most selfishly profitable, neighborhood and land destructive, wildlife compromising manner in which to do business. And AAWC states, “We are a good neighbor.” To whom?

AAWC has been presented with numerous options in this project yet they continually choose the cheapest and most profitable options for themselves: we say bury the reservoirs as originally promised to the residents or relocate them to the northern parcel where excavation and land are not an issue, neighbors won’t complaint and partial burial will cost tens of thousands of dollars less than placing them where they plan to at this juncture. We believe the solution is simple. Do the right thing or we’ll gladly see AAWC, City of Scottsdale, Technical Solutions and all other entities associated with this project right down to the planner and architects, in Superior Court.

On a separate note, every other Tuesday evening, we appear in front of the City Council and reiterate that we are not going away until this problem is resolved. The City has chosen to ignore all of the inadequacies in their approval process for this project at the expense of the 235 affected neighbors and the hundreds of others who will suffer property value loss as a result of their rubber stamp decisions. We ask, what is the City’s purpose if not to work for the benefit of the citizens? What would provoke them to damage neighborhoods by allowing this magnitude of unnecessary water reservoir construction, go against the very grain of their firmly esconced Scottsdale Cooridor beautification project and deny its citizens protection against an international conglomerate?


We want that which was promised to our residents on numerous occassions by the Arizona American Water Company and affirmed by Technical Solutions during the diligence process...Two reservoirs, 24 feet total in height, 14 feet recessed into the ground with 10 feet above ground, hidden behind an 8 foot retaining wall with beautiful landscaping to camouflage the enormity of the structures.

Bury them or move them...those are your choices, AAWC.

Our base of concerned residents continues to grow and grow and grow...

Thank you for your ongoing support of our cause

Hmmm. Doesn't look like any actionable allegations there... but there is apparently a New Jersey corporate connection. But really, I'll consider all corporation vs the citizen stories to be of local importance to this blog.