Cochise supervisors table 25-year water franchise for Cactus State after debate over future fees

The Cochise County Board of Supervisors on March 11 tabled Resolution 25-03, which would have granted a 25-year water service franchise to Cactus State Utility Operating Company, LLC, after supervisors debated language that reserves the county—or possible future fees and questioned whether that could let a future board quietly add charges passed to customers.

The matter was presented during the public hearing portion of the meeting by Mr. Correa, the county—hief civil deputy, who said the franchise is required under state law and that the 25-year term and a broad clause were standard to protect the county against future unknowns. "We reserve the right to, you know, charge a fee or a fine or whatever that may be enacted by a future state legislature," Mr. Correa said.

The board ebate focused on whether including language about potential future franchise fees effectively makes it easier for a later board to impose a fee that would be passed through to consumers on utility bills. Supervisor Crosby said the clause risked enabling a future fee "by sleight of hand," adding that customers could end up paying a franchise fee they did not expect. "If that day does come and the legislature says the counties can now do franchise fees, that a future board of supervisors, after we approve this resolution, can basically just say, okay. Let's just add the franchise fee, stick it in the consent agenda, and vote on it," Crosby said.

County staff and other supervisors noted multiple steps would be required before any fee appeared on customer bills: the state legislature would first need to authorize counties to collect franchise fees, and then a future board would have to vote to impose any fee. Mr. Correa said the clause is meant to protect the county against long-term unknowns when companies invest in long-lived infrastructure. "They want at least 25 years to get their return on investment," he said, explaining why 25-year terms are used.

Supervisors also discussed procedural options. Staff advised that a public hearing on a franchise requires published notice posted three times, so additional public notice and a work session would be required before the board could revisit the franchise. Supervisor Crosby moved to table Resolution 25-03, "granting a water service franchise to Cactus State Utility Operating Company, LLC." The motion was seconded and carried; the board chair then announced, "The motion is tabled. We'll take it up at a future future meeting."

The board did not delete or alter the franchise language at the March 11 meeting. Staff told supervisors they could schedule a work session to draft alternate language or to consider amendments and that the franchise would need additional noticed public hearings before final action.

What happens next: The resolution will return to the board at a later meeting after staff and supervisors meet to consider language changes and schedule the required public-notice hearings. No final action on granting the franchise was taken on March 11.