The Maricopa City Council decided Tuesday to discontinue efforts to purchase a local water utility that has been the source of recent discontent in the city.
The council unanimously decided to cancel any further efforts to purchase Global Water Inc. after a third-party cost analysis came back dramatically lower than the utilities self-determined price tag.
The move kills any chances of a buyout that was already very unlikely.
Greg Swartz, president of public finance at the investment bank Piper Jaffray, presented the cost assessment which gave the water company a valuation of between $75-$107 million.
According to the presentation, Global Water’s self-determined valuation started at $500 million.
Ron Fleming, the president and chief executive of Global Water, responded to the assessment with frustration, adamantly declaring that the utility “was not for sale.”
“There is not one shareholder, not one person on my board, not one person on my team that is looking to sell to the city of Maricopa,” he said.
The company, Fleming said, was only willing to sit down with city officials to discuss the possibility of a buyout as a show of good faith and to display their intentions of working closely with the city.
Likewise, city officials wanted to sit down with Global Water to exercise their “due diligence” as leaders and representatives of their community.
“I made a promise that one of my goals during my service would be to get some answers,” Councilmember Nancy Smith said alluding to her campaign promise to improve the water utility, even if that meant a possible public buyout.
Now, she said, “we don’t need to speculate anymore.”
Councilmember Peg Chapados, like others on city council, said her consideration of the buyout was based on two factors – improving the water quality or lowering the rates.
If the city were to buy Global Water, she said, “I can’t guarantee I can do either.”
Even if Global Water would be willing to negotiate a price somewhere between the two figures, the City would still have had to increase the already higher-than-average rates in order to make it a viable decision.
Most city officials were satisfied with the way Global Water had addressed the community’s concerns. Some even credited them with investing in the community. Others, including Smith and Chapados, expressed hope the company will continue to invest in the city’s economic development.
Mayor Christian Price, too, was satisfied with the result of the inquiry. He reiterated an Arizona adage he previously mentioned at a Global Water hearing, pointing out the impassioned debate surrounding such a precious resource as water in a desert town.
“Whiskey is for drinking,” he said, “but water is for fighting.”