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Q: Why is this election being held?

A:

In accordance with Arizona Revised Statutes (A.R.S.) 9-514, the City of Surprise, Arizona (the “City” or “Surprise”) is submitting a single question seeking authority to purchase and acquire Circle City Water Company (“CCWC”).

The purchase shall be funded from the sale of existing water assets.

Q: Why is the City seeking to purchase CCWC?

A:

One of the City Council’s Strategic Plan Goals is to “Ensure sufficient water resources for current and future needs.” In order for the City’s Water Utility to meet that goal, it must continue to expand its access to more water and increase its water portfolio, particularly its access to Colorado River water delivered through the Central Arizona Project (“CAP”) canal system.

CCWC is a small water service company located in the northern part of Surprise’s future planning and water service area. In addition to its infrastructure and customer base, CCWC also has a sizable CAP allocation which, if acquired, would greatly grow the City’s ability to access more Colorado River water. Having greater access to renewable water supplies affords the City the ability to meet future demands and avoid shortfalls.

Q: What are the benefits of this acquisition?

A:

In order for a city to pump, treat, and deliver water to its customers, it has to demonstrate that it has an equal amount of renewable water in order to offset the water it pumps from the ground. Surface water from rivers, such as the Colorado River, is considered a renewable supply.

At the present time, the Colorado River is the only renewable surface water supply available to the City. Therefore, growing the City’s rights to more of this water is paramount. This acquisition would grow the City’s annual right to Colorado River water by over 38 percent.

The benefits of a community having a greater access to water supplies, means that the community has the ability to not only support its residential population; but also the ability to attract and retain businesses in a variety of industries. More businesses offer citizens a great opportunity to work closer to home, grow the City’s tax base, and improve its ability to attract more employment opportunities.

The ability to grow the City’s water allocations today is a more cost effective way of growing the portfolio. If the City were to seek out water rights when the water is actually needed, the cost of those rights would be much greater. The costs to acquire rights to additional water sources continue to rise.

Q: How will the City pay for CCWC?

A:

Much like a business has a financial portfolio; the Surprise Water Utility has a portfolio of water assets. These assets have value. The City intends to utilize the proceeds from the sale of some of these assets to offset the costs to acquire CCWC.

Q: Will the water rates of the City’s water utility increase as a result of this acquisition?

A:

Since the City intends to utilize the proceeds from the sale of its water portfolio assets to fund the acquisition of CCWC; Surprise water rates are not anticipated to increase as a result of this acquisition.

Q: Will Surprise taxes be raised as a result of this acquisition?

A:

Since the City intends to utilize the proceeds from the sale of its water portfolio assets to fund the acquisition of CCWC; Surprise taxes are not anticipated to be raised as a result of this acquisition.