Documents Related to the Status of the District
as a Water Improvement District

Commissioner Gleason's Questions About the Status of the District. Commissioner Gleason poses the following two questions:
1. Does the authority under which Pine Strawberry Water Improvement District (District) was established allow it to own and operate a public water system?
2. If the Commission were to approve the Company's financing application, would the District be able to use the $300,000 for purposes other than paying for the K- 2 test well?

District's Response. District's response is that they are allowed to own and operate a water system under A.R.S. 48-909 and 48-1014. They respond that the $300,000 could be used by the district for any lawful purpose associated with acquiring or operating the water system.

Brooke's Response. Brooke's response is that the District does not have the authority to acquire the water companies and goes into a great deal of detail as too why. In summary, the reasons they list are:
1.In the original petition in 1995, the petition was unequivocal on two points. One, the District was not formed as a domestic water improvement district. Two, the District was not formed for the purpose of acquiring PWCo or SWCo or owning and operating a public utility.
2. Special improvement districts are limited to the powers specifically granted and do not have the same powers as a municipal entity. The minutes from the formation of the District explicitly say that it doesn't have the power to purchase/operate a water system. The bylaws of the District also state that it is for the improvement of water resources.
3. Gila County issued a letter in 2004 to citizens that specifically says that the District is a Water Improvement District and would require conversion to a Domestic Water Improvement District through an election.

Supporting Material #1. This contains:
1. Several of the local domestic water improvement districts were established at about the same time as PSWID. Examples are provided of how their resolutions for establishment differed in language from the PSWID resolution.
2. Petition that was signed in 1996 to establish the PSWID.
3. The minutes from the Board of Supervisor's meeting where the formation of PSWID was formed.
4. July 12, 2004 letter from the County affirming that PSWID is a Water Improvement District and would require an election to convert it to a Domestic Water Improvement District.
5. Collection of miscellaneous documents over the years that refer to PSWID as a water improvement district.

Supporting Material #2. This contains:
1. March 19, 2007 letter from an attorney for the County about PSWID not being covered by the County's insurance because it is a special taxing district and operates independently from the County. In this letter PSWID is referred to as a "Domestic Water Improvement District". This is one of the main items that the board is basing their interpretation on.
2. March 1, 2007 letter from the insurance company to the attorney for the County.
3. Mission Statement for PSWID. No discussion in the mission statement about owning/operating a water system.