Three days in August: How a water outage in AZ exposed cracks in customer service

For three days in August, hundreds of residents in Parker, on the banks of the Colorado River, went without running water. The town’s provider, Brooke Water, LLC, had a series of five water leaks and a valve break. The Arizona Corporation Commission later investigated. (Photo by Joshua Bowling/Cronkite News)

PARKER – The high was 96 degrees on the day the tap went dry at Terry Mestas’ house. Mestas was among several hundred residents who endured heat that climbed to 106 degrees over three days in August, when five water-line breaks and a weak pressure valve shut down the water.

Mestas’ neighbors had their children take baths in the Colorado River, according to the written complaint. Gene Ohlendorf said he used buckets to scoop water from the Colorado River for his 88-year-old mother-in-law and his 93-year-old grandmother. The local public works department trucked in bottled water to the town for customers, records show.

An Arizona Corporation Commission report later told the story of calls to part-owner and manager Robert Hardcastle on the cell phone number he supplied that went unanswered, and customers who say their calls to a call center in Costa Rica ended in frustration.

A water-line break started on a Sunday night, Aug. 21, and erupted into four more before the system was repaired and running water was fully available on Wednesday morning, Aug. 24. The shutdown spurred a Corporation Commission investigation, as well as customer complaints over water quality, lack of communication and service, and a response from Hardcastle that the criticism of the water company was unfair and unwarranted, according to public documents, interviews and Corporation Commission meetings.

Months later, after reams of documents and several hearings with claims from acrimonious residents, the investigation is still going on. Corporation Commission member Bob Burns acknowledged the case has dragged on, but said the case likely still has to come before an administrative law judge.

The situation shows the tense relationship between residents and Brooke Water LLC, the only water utility supplying about 2,000 customers in the century-old city on the California border. Numerous small water companies that dot Arizona, on urban edges and in rural areas, often face unique challenges as they serve thousands of residents. Just before and after the Parker outages, the Corporation Commission instituted new policies for small water companies that include tightening the process for hearing rate cases and issuing guidelines to determine the viability of a water company.

“We pay a high price for water,” Jackie and Gerald Roza later wrote in a complaint about Brooke Water to the Corporation Commission. “However, we do not drink the water because we do not trust the quality of the water. I do not know of any of our neighbors who do drink it.”

The Corporation Commission investigation found a history of customer complaints with the company’s international call center, failing equipment and issues with service. A Sept. 20 report from the Corporation Commission on Brooke Water found flaws:

– “Extensive” rust was discovered inside one 50,000-gallon storage tank that could contaminate the water with insects or other material.

– Asbestos-cement pipes, common from the 1930s to the 1980s, are still operating for most Parker customers and are nearing the “end of their useful life.” The Corporation Commission is investigating whether the pipes pose a health risk. (Cronkite News commissioned a water test which showed the water fell within federal limits for copper, lead and arsenic as well as asbestos).

– Brooke Water has spent substantially below its annual budget for repair and maintenance in Parker, according to the report. The rates it charges customers are based on $267,309 annually. But “in 2015, reported repairs and maintenance expense were $89,508.00,” investigators wrote. Hardcastle wrote, “You do not understand this issue correctly. Any conclusion of this kind would be a significant error” in an email to Cronkite News about the budget discrepancy.

Hardcastle, who also is a part-owner of a water company for nearby Circle City, Morristown in the northwest Valley and is a former part-owner of water utilities in Payson and Strawberry, said the company worked hard to repair leaks in Parker.

“Both operations staff and management worked tirelessly to restore service to its customers,” Hardcastle later wrote to the Corporation Commission.

Hardcastle declined several interview requests from Cronkite News but later answered some questions by email.

Yellow water after a repair

Brooke Water provides service to about 2,000 customers in Parker — a town of about 3,000. The breaks in the Lakeside Water system, which butts up against the Colorado River, hit neighborhoods that house about 800 customers, according to the Corporation Commission.

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Documents from the La Paz County Sheriff’s Office and Corporation Commission detail the outages. The first leak happened at about 9 p.m. on Sunday night, Aug. 21.

Documents show one resident called the Brooke Utilities emergency hotline at 2 a.m. on Aug. 23 — nearly two days after the initial outage. By 6 p.m. that day, the county brought a water truck out to Parker and the La Paz County Public Works Department brought out 30 cases of bottled water, according to the sheriff’s office.

The county sheriff’s office reported they tried to reach Hardcastle, who lives in California, but could not, according to the sheriff’s transcript.

“Later, staff learned that at no time was Mr. Hardcastle in the Parker area during or after the outage,” the Corporation Commission report says.

Some residents said they tried calling the customer service center in Costa Rica, but couldn’t get through.

“Apparently, County and Emergency officials had not been contacted about the outage,” the Corporation Commission report says. “One Official indicated that while the outage occurred on Sunday, he did not hear about it until Tuesday. Further, he heard about it from a customer, not the Company.”

Gene Ohlendorf, who lives in a multi-level home on the riverfront, said he went down the driveway to scoop water in buckets for his mother-in-law and grandmother so they could bathe.

“I’ve got my mother-in-law up on top, who is 88, and my grandmother — I have her right around the corner and she’s 93,” he said. “I made sure they were OK. That’s part of the reason La Paz County and our district supervisor are so upset, is nobody can get a hold of them.”

Customers like Mestas had to work around the outages.

“We all had to fill empty water bottles with water from the river to flush our toilets,” Mestas wrote to the Corporation Commission. “It took several days to repair the broken water lines. The repairmen would quit working in the afternoon and start again the next day. If Brooke had competent management they would have had crews working around the clock.”

At 6:48 p.m. on Aug. 23, the sheriff’s office reported the water had been turned back on, but there was a problem.

It was yellow.

The problems were fixed by the morning of Aug. 24. Hardcastle contracted EPCOR Utilities to assist with repairing the leak, reconstructing sites which were affected by the outage and rebuilding or replacing the pressure-reducing valve.

Hardcastle later said his company was working hard to fix the problem, and estimated it affected no more than 600 customers.


‘We never drink this water’

Largely a retirement destination, Parker houses residents on riverfront properties who live in a sort of home away from home, coming to play on the river during the weekend and returning to California for the rest of the week.

Other residents spend every day in the arid, tight-knit community.

Some residents still refuse to cook with what comes out of their faucets, opting instead for bottled water to take care of their daily routines.

“We won’t drink it,” Ohlendorf said. “I won’t feed it to my animals.”

Other Parker residents also expressed concerns about using the water.

“This is the most expensive water that I can’t drink or cook with,” Parker resident Laura Miller said over the phone at a Sept. 23 Corporation Commission meeting.

Parker resident Anna Camacho said her sinks were corroded and water in the toilet was black.

“There is something very clearly wrong,” she said.

Several residents said they only use tap water for daily tasks, but do not drink it.

“We never drink this water, but we take our life in our hands washing the dishes,” Parker resident Peter Metzen wrote to the Corporation Commission. “Now (I) only use bottled water for cooking and drinking purposes.”

Other residents, like Nancy Hanner, have used the water regularly without any adverse effects.

“I mean, I’ve drank it, I’ve used it for when I boil my noodles or I’m cooking or doing something,” Hanner said. “It’s never — that I could say — it’s never made my family or I sick.”

Since 2005, Brooke Water has received 179 customer complaints, according to the Corporation Commission report.

The report also says the water is safe to drink. Brooke Water’s water meets Arizona Department of Environmental Quality standards, according to the report.

Hardcastle, in an Oct. 24 document filed with the Corporation Commission, pointed out the Corporation Commission findings.

“Brooke has no tests, samples, regulatory reports, or records of excessive chlorine residual levels that exist in the LWS, any Brooke water system, or the Williams service location,” Hardcastle’s document says.

Cronkite News commissioned a water test of Parker water from IAS Laboratories in Phoenix that revealed the water fell within the EPA limits for copper, lead and arsenic. The tests also showed the water tested negative for Coliform and E. Coli.

Another water test showed a sample taken about 100 yards from a Brooke Water tower site came back “acceptable” for asbestos levels. However, the Corporation Commission is investigating whether or not the asbestos poses a health risk.

Corporation Commission investigators looked at the system’s pipes that have been in the ground since 1962. The pipes “are probably getting near the end of their useful life,” the report says. It pointed out something else: Most of Brooke Water’s pipes are made of asbestos-cement.

Asbestos-cement piping was common from the 1930s until the 1980s, the report says.

“Brooke does not install ABS piping,” Hardcastle wrote in an email to Cronkite News. “The original developers of Brooke’s water system used some of this piping when they developed the water systems in the late 1960’s and 1970’s. This piping continues to perform at high levels without health risks.”

Equipment, customer service concerns

The report also had other findings, ranging from the state of the company’s equipment to its finances.

Two water-storage tanks are fine but a third tank has “extensive” rust that may have compromised the tank’s interior, raising the possibility of insects or other material contaminating the water, the report says.

“Staff determined based upon its field inspection that the mechanical equipment is in good working order and maintained adequately,” the report says. “The exterior of all plant equipment made of steel has not been adequately maintained … the rust was quite extensive on the 50,000 gallon storage tank with the possibility of rust through to the tank interior suspect. If the interior has been compromised, contamination could occur.”

That needs to be handled, the report says.

“Staff recommends that the Company repair the rusted areas of the 50,000 gallon storage tank and inspect the tank interior,” the report says.

The Corporation Commission investigation also questioned Brooke Water’s maintenance expenses. Although the company has drawn on money allocated for repairs, it hasn’t spent all of that money as budgeted, according to the report. In 2015, it spent less than half of the amount set aside for repairs and maintenance.

“The annual cost-of-service utilized to set the Company’s rates included a level of recurring level of annual repairs and maintenance expense of $267,309; however actual repairs and maintenance expense has been substantially below this level,” the report says. “For instance, in 2015, reported repairs and maintenance expense were $89,508.00.”

Brooke Water has not filed for a rate increase since 1991, according to the Corporation Commission report. That was before Hardcastle owned any stake in the company.

During a Sept. 23 Corporation Commission meeting in Phoenix, five Parker residents called in to complain about communication and service issues, as Hardcastle and commissioners listened.

Other residents at the meeting complained of poor customer service.

“They have literally one person servicing the whole area, which is concerning considering the amount of elderly people that we have in our community,” Ohlendorf said by phone.

Corporation Commissioner Andy Tobin voiced concerns over Brooke Water’s management at the meeting, as well.

“These are not isolated incidents from what I’m seeing,” Tobin said at the meeting. “I’ve got the Better Business Bureau — and I don’t see too many of them — I’ve got an ‘F’ rating from the Better Business Bureau. It’s clear that we’ve got an ongoing problem over here; it’s systemic at best.”

Hardcastle said the company had “made some mistakes.”

“I think there have been some issues that we could certainly do a lot better and I think some of those that you addressed are ones that we’re looking at and are committed to improving and I think there is substantial room for improvement,” he said at the meeting.

“Brooke has worked very hard for many years re-making the legacy company into a more efficient, streamlined and compliant organization,” Hardcastle wrote in the Oct. 17 response.

What happens next

Corporation Commissioner Tom Forese said it should not have taken as long as it has for information to come out.

“I’m very angry right now that we have this type of reaction from your customers,” Forese said to Hardcastle at the Sept. 23 meeting. “And everybody’s looking at each other like, ‘This is the first time we’ve ever heard of this’ and they’re saying that they’ve been reporting this time and time again to an offshore call center that’s hard to connect with … The fact that this is news to any of us is just horrible.”

The Corporation Commission set up new policies for small water companies.

“The Commission also adopted standards to process emergency rate cases faster, guidelines which determine the viability of a water company, and whether a company’s financial position issues has a significant impact on rates,” a Corporation Commission statement says.

Commissioner Bob Burns, in an interview, said the Corporation Commission could end up installing an interim manager at Brooke Water.

“It’s kind of hard to get your arms around exactly what’s going on,” Burns said.

The next step would be for an administrative law judge to hear from both sides and explore evidence. But that has yet to be scheduled.