Truxton Canyon Water Company has history of failing to file arsenic levels reports

KINGMAN - A decision from the Arizona Corporation Commission late last year appears to be complicating the construction of a proposed arsenic treatment facility for the Valle Vista subdivision and surrounding areas.

Truxton Canyon Water Company's latest attempt to construct an arsenic treatment facility stems from ongoing issues with the Arizona Department of Environmental Quality dating as far back as 2004.

A decade of violations

In a decision from the Arizona Corporation Commission on Nov. 14, the ACC states that Truxton is under a consent order with the ADEQ for its "failure to submit monitoring results for residual chlorine in its distribution system" from 2004-2006 and January of 2007. In addition, Truxton failed to submit testing results for arsenic between October 2009 and March 2010 as well as between July 2010 and September 2010. The company also failed to provide notice of their arsenic levels between July 2008 and June 2010.

This led to a violation notice from the ADEQ in 2011, which at that time required Truxton to complete an arsenic treatment facility by December 2012. Truxton failed to do so.

Since that time, the ADEQ reported that arsenic levels are on the rise and that Truxton has "failed to comply with disinfecting byproducts, and that disinfecting byproducts are a health concern because byproducts are cancer causing agents."

In the decision, the ACC noted that Truxton is not in compliance with the ADEQ as of March 2014, as the water system has "major deficiencies for failing to monitor chlorine residuals in the water, exceeding the arsenic standard, and failing to monitor for nitrate levels."

The arsenic treatment facility

In response, Truxton proposed a $419,208 arsenic treatment facility that would blend water from high arsenic wells with water from low arsenic wells. Their wells in the system have arsenic levels ranging from 4 to 36 parts per billion (ppb). The EPA requires water companies to have less than 10 ppb.

The plan faced opposition from the ACC, both in terms of cost and implementation. Based on the findings of a staff engineer, the proposed facility would not be a true blending system but rather a combination of blending and an "absorption media system."

"An absorption media system is charcoal or fabric material that would absorb the inorganics in the system. It's like a sponge, basically. There's all sorts of different media," said Dean Wolslagel, an independent water tester based out of Kingman.

Truxton's plan also includes improvements to numerous other capital projects, which the ACC disapproved of and recommended that the treatment facility cost $259,800.

Buying, selling: Who owns what?

Financing the arsenic treatment facility would originate from a loan issued by the Water Infrastructure Finance Authority of Arizona (WIFA). Truxton applied for a WIFA loan totaling more than $1.8 million. Of that, $419,208 would cover the construction of the arsenic treatment facility and the remaining funds would be used to purchase the necessary wells and transmission lines so that construction could take place.

The ACC had numerous issues concerning the WIFA loan amount proposed by Truxton. First, and the most glaring for the ACC, was the relationship between Truxton and the owners of the well and transmission line, the Claude K. Neal Family Trust. Both Truxton and the trust were represented and testified on behalf of by Rick Neal during the ACC hearings leading up to the November decision.

Depreciated value of the wells and transmission line, in combination with Truxton not owning the assets where this treatment facility would be constructed, led the ACC to recommend that Truxton not obtain any WIFA loan financing until the assets were transferred to Truxton.

"Truxton is an alter-ego of the trust," the ACC noted.

The ACC also estimated that the proposed arsenic treatment facility should cost $259,800, and that Truxton acquiring the assets from the trust shouldn't cost the nearly $1.4 million stated on Truxton's WIFA loan application.

A chain of reports from the ACC, Truxton, and the Valle Vista Property Owners Association have been submitted to the ACC since November. The latest one, submitted on June 9 by Truxton, states that the water company has acquired the wells, transmission lines, storage tanks, and related plant equipment from the Neal Family Trust as of Dec. 31, 2014. The report also states that the property that the equipment sits on, however, was not transferred to Truxton and is still owned by the trust.

Truxton argues that "it sees no problem with the trust granting easements to Truxton" to comply with a memo issued by the ACC to Truxton on April 25. However, the water company has stated that this would take "tens of thousands of dollars to accomplish" and it would not be completed in time to comply with both the ADEQ and the ACC's decisions on the arsenic treatment plant.

To make matters more complicated for Truxton, WIFA has advised that Truxton will not be approved for a loan until its debt issues are resolved with the Valle Vista Property Owners Association.

This also won't stop the ADEQ from redacting a court order requiring Truxton to complete the arsenic treatment plant by May 2016.

"ADEQ is hopeful that the court order will compel Truxton to complete the installation of the arsenic treatment system as directed. If Truxton does not comply, ADEQ would file a motion with the court to seek relief," said Caroline Oppleman, public information officer with the ADEQ.

A representative from Truxton Canyon Water Company was not available for comment by the time of publication.

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