Florence council won’t speed up Johnson purchase
By Mark Cowling | Florence Reminder & Blade Tribune
A vote on a purchase agreement and management contract with Johnson Utilities is still scheduled for May 27, despite pleas from the utility that the town’s approvals were needed sooner.
Vice Mayor Tom Smith said Town Council members had just received documents on the day that Johnson Utilities personnel wanted them to take action, leaving little time to review the nearly 100 pages concerning a Florence take- over of the water and sewer company.
Smith said if the council votes first it could sway a public vote scheduled for May 20. He explained afterward that the public may assume “they already voted, what’s the use of us voting?”
Before the public portion of last week’s meeting, the council met for two hours behind closed doors on the town’s potential purchase of Johnson Utilities, the water and sewer provider to Florence, Anthem and the San Tan Valley.
Johnson’s attorney, Gary Drummond, told the council that approving the purchase agreement doesn’t unconditionally obligate the town to buy or the company to sell the assets, and “it’s not our intent to sway the voters.” But without an executed agreement, John- son officials can’t go before the Arizona Corporation Commission for approvals or the Phoenix Industrial Development Authority for bonds, he said.
“I don’t think what we are requesting is at all unusual,” Drummond told the council. “I think we can do this concurrently instead of sequentially.”
Councilwoman Vallarie Woolridge told Drummond that what Johnson requested might work in the corporate world, but when government entities and taxpayer dollars are involved, “we’re held to a higher standard.”
Company owner George Johnson told the council he was “kind of at a loss for words.” He said despite other offers, he came to the town and has dealt with the town in good faith. He said the town’s economic study, engineering appraisal and accounting study have been done. “Please, either vote us up or down,” Johnson asked.
Mayor Tom Rankin asked Town Manager Charles Montoya for his
recommendation. Montoya replied, “Do I think this is a great deal? I do.” But, he said, the town’s legal counsel hasn’t received all the information it has requested.
Town Attorney James Mannato said Florence has been requesting the information for “quite some time.” He said after the meeting that the information included line extension agreements with developers and master utility agreements, more than 450 contracts in all, that significantly determine the utility’s future financial obligations.
Because of the size of the franchise, it takes time to pull the various materials together, Drummond said.
Johnson added, “There’s been last- minute things thrown at us, thrown at us, thrown at us.” He asked the council to approve the contract subject to conditions. He said with the process stalled at this stage, “we all look like fools.”
Woolridge said she resented being called foolish. She said the town has
been requesting the information for some time, and now Johnson Utilities appears to want to fast-track the sale without the town’s having all the information.
Michael Cafiso, an attorney who has served as the town’s bond counsel for about 20 years, said he supported not rushing the agreement. “The larger these acquisitions, the more time you take with up-front diligence,” Cafiso said. “I agree it’s a fantastic deal … but the diligence that he is requesting is not unusual.” He said no one buys a car without driving it, or a house without looking at the inside. “I think those are apt analogies.”