To:    All Non-Residential (Commercial) Water Users

Special Meeting Notice: Carefree Water Company Board of Directors May 14, 2015, 5:00 p.m.

Town Council Chambers, 100 Easy Street, Carefree, AZ 85377

Meeting Summary:    The Water Company Board of Directors will consider releasing both historic and future commercial water use data to Black Mtn. Sewer Corp. (dba Liberty Utilities). Historic data will be used for the purpose of investigating sewer rates that are based on water usage. Future monthly water use data will be used for the calculation of your sewer bill if approved by the Arizona Corporation

Commission.

BACKGROUND AND DETAILS Many wastewater service areas in Arizona utilize metered water usage (inflow) to determine sewage outflow from a place of business. Metered water inflow is typically considered to be one of the most accurate methods to determine a sewer customer’s outflow into a wastewater system. This approach to determining sewer outflow is common in the Phoenix metropolitan area because water and sewer service typically fall under the same municipal “umbrella”. In Carefree, however, your water provider, the Carefree Water Company, is separate from your sewer provider, and historically water use data has not been available to Black Mtn. Sewer Corp. (BMSC).

As part of an agreement with the Arizona Corporation Commission (ACC), and tied to a recent ACC Hearing, BMSC has committed to initiate a Rate Case before the ACC no later than June 30, 2015. As part of this Rate Case, the ACC has directed BMSC to investigate the use of actual water usage data to calculate more accurately commercial wastewater flows into the system.

On May 14, 2015, the Water Company Board of Directors will discuss responding to this specific directive from the ACC by authorizing the Water Company to release commercial water usage data to BMSC. Initially, 3 years of historic commercial water use data is proposed to be provided to BMSC for a rate setting analysis that will be submitted to the ACC. If a water usage based sewer rate is approved by the ACC, future monthly commercial water usage data would be provided by the Water Company to BMSC for billing purposes.

BMSC has indicated that a Rate Hearing typically takes 12 to 16 months to complete. The ACC rate setting process is public, and there will be ample opportunity for input from the general public and rate payers during that process.

Pursuant to the Carefree Water Company Rules, Regulations, and Policy, the information on each of our non-residential (commercial) water users is confidential. Notwithstanding, if approved by the Board of Directors, the Carefree Water Company intends to release the commercial water use data to BMSC to allow this information to be utilized by BMSC in the upcoming rate case before the ACC. The Water Company is also proposing to enter into an agreement with BMSC under which BMSC will be required to treat this commercial water use data as confidential.

More information on the Water Company Board meeting and this action can be obtained from the following organizations and staff members:

Carefree Water Company, Greg Crossman, General Manager, 480-488-9100, greg@carefreewaterco.com Town of Carefree, Gary Neiss, Town Administrator, 480-488-3686, gary@carefree.org Black Mtn. Sewer Corp. (Liberty Utilities), Todd Wiley, Assistant General Counsel 623-240-2087