Records on possible water deal blocked

A rare confidentiality agreement brokered between a private developer and Florence is concealing the viability of a multimillion-dollar water and sewer utility that serves more than 20,000 customers in the Johnson Ranch area.

George Johnson, a Scottsdale-based developer, declined a $190 million offer from Florence this winter to purchase his private utility that some customers say is overpriced and does not serve well the sprawling suburban communities in northern Pinal County.

Florence started a study to potentially purchase the utility in January 2007. At the time, Johnson and Florence officials agreed Johnson would be tipped off to any public records requests that may have revealed damaging information about his utility, Town Attorney James Mannato said. He said it was done "because that was what George Johnson wanted as an agreement for conducting negotiations."

Craig Morgan, an attorney with Phoenix-based law firm Perkins, Coie, Brown and Bain, said side deals should not block the public's right to taxpayer-funded studies.

"No, no, no. It's a public record or it's not a public record," Morgan said. "They can't make third-party side agreements in an effort to avoid their obligations under Arizona public record law."

Johnson, who built the namesake community Johnson Ranch south of Queen Creek, has run into trouble with other developments.

In December, Johnson was forced to pay the state $7 million to end a three-year legal battle that implicated him in a laundry list of environmental violations during his attempt to develop a swath of Pinal County desert known as La Osa Ranch.

DOCUMENTS BLOCKED

The Tribune was told it would receive access to the Johnson utility study this week after making a formal public records request for the information months ago. Mannato said that plan changed after Johnson Utilities Co. said it would seek a court order to shield those documents from the public.

Brian Tompsett, an executive with Johnson International, said that a protective order to conceal the public documents was requested Monday in Pinal County Superior Court.

Taxpayers footed the bill for Florence's $308,000 utility study in 2007, which would appear to make it a public document under Arizona law, Morgan said.

The study examined the condition of the water and wastewater system, including how it was built, engineered and designed.

Johnson swooped in earlier this month and paid $219,000 of the study's costs - leaving taxpayers with a $90,000 bill. Town officials said they did not question why Johnson agreed to reimburse a majority of the study's cost.

"We didn't inquire into his motives," Mannato said.

Mayor Tom Rankin also said there was nothing wrong with an arrangement under which a private developer paid almost fully for a public study. He said it had nothing to do with helping to shield those documents from public view.

"All I know is that it's something our attorneys and their attorneys agreed to," he said. Rankin said the courts will decide what is public and what is not. "We're going to have to go to court, and we knew that was going to happen."

PUBLIC CONCERNS

Residents regularly complain about the cost and quality of Johnson Utilities, which serves Anthem at Merrill Ranch in Florence along with unincorporated housing developments along Hunt Highway.

Johnson Ranch resident Raymond Babeu said he isn't happy with Johnson Utilities' service and the way the company is run. Babeu, who pays about $76 a month for water and sewer, said he won't drink water from the tap at his home, either.

"It's sad when you spend $300,000 of taxpayers' money and you can't see the report," he said. "I don't know how a guy can come in and gag a city the size of Florence. There's got to be some kind of mess there. By them not buying, it tells you something."

Copper Basin resident John Pardue said he's concerned about the soundness of the water and wastewater system serving his neighborhood and others. Pardue said he gets bills that run the gamut - from zero gallons to more than 30,000 gallons - though he says he doesn't change his usage.

"I should be able to, as a resident and as a customer, walk in and see the report myself," he said.

Rankin, along with town management, has said it is important for a municipality to control its own water in all of its neighborhoods to provide "more uniform service," hence their interest in purchasing Johnson Utilities. Florence, a town of more than 24,000 people, brought in a consultant to negotiate the complicated agreement that could have led to the purchase of the utility.

Attorney Marvin Cohen, with Scottsdale-based Sacks Tierney law firm, served as a consultant for Florence. He said a confidentiality agreement that shields the study from the public is rare.

"They contended that there was information that would be harmful to them if it were disclosed," he said. "If the information became public, they couldn't make a different agreement with a different developer."