In the 106th year of its life now, the Draper Irrigation Co. is about to experience the unthinkable.
John Q. Public is taking over.Almost everybody says it's inevitable and for the best, but what seems an impending transfer from private hands to taxpayers is surrounded by more than a little small-town intrigue.
Though negotiations have been ongoing for months, the city and Draper Irrigation can't quite come to terms, their standoff evoking ghosts of old-fashioned water wars.
Ruled by an aging board of directors reluctant to let go of their pastime, the water company, established by pioneer farm families, is by far the most abundant font of local water, supplying more than 90 percent of local homes.
And the 10,000 acre-feet of water it claims annually from Utah Lake and from mountain streams to the east - used now largely for a dwindling agricultural community - will fuel a dramatic housing surge in Draper, likely to double in population by the mid-90s as residential development in the Salt Lake Valley continues to spill south.
Whoever controls the water controls the boom.
City Hall knows this and off and on over the years has made casual but unsuccessful overtures to buy the company.
As progress has come to the town of 7,500, with subdivisions springing up at every point of the compass, interest in the water company has grown. Last week the city tried to set up a special improvement district with an eye toward claiming Draper Irrigation.
Water company directors knew that had the improvement district been established, the city would've gained condemnation powers.
Opposition appeared in the form of a petition drive headed by local resident Dana Coker, who has ties with Draper Irrigation but said she is opposed to the takeover "from a private citizen's standpoint."
She said opponents gathered signatures of more than half of Draper's landowners, enough to stop the city's effort to establish the district.
Coker, a consultant for Sun Engineering Co., which does contract work for Draper Irrigation, said she is against any buyout by City Hall "because of Draper city's inability to manage what they do have."
But what the city has isn't much: Its water company serves only about 60 of the town's 1,700 households and runs an annual deficit of $20,000. The shortfall, say city defenders, is because of the absence of any economy of scale; if City Hall was providing everyone with water, it wouldn't lose money.
On the surface, the takeover appears imminent because Draper Irrigation last year borrowed $7 million in tax monies from the state to build a pressurized irrigation system. The loan came with strings attached: an April 1 deadline to either come under rate-regulation from the Public Service Commission or from the city.
The company's directors say that for nostalgic reasons they would just as soon leave it in the hands of locals - and see it survive in some guise - so they favor a "privatization" deal with the city.
"The desire of all of the directors at Draper Irrigation is to see water rights stay with the city," said Wayne Ballard, a former councilman who sits on the company's board of directors and for years wore both hats in an unusual dual role.
Councilman Jeff Rasmussen said a privatization arrangement would be acceptable.
"We'd like to acquire the irrigation company, keep the shares here in Draper, using their management and workers to run it," said Rasmussen.
Still, an impasse exists, mostly because of "a long series of hurt feelings and egos," according to one well-connected Draper resident who didn't want to be identified publicly.
"I wouldn't be surprised to see litigation," said the resident.
Because the water company disperses so vital a commodity, former Mayor Kumen B. Davis, who left office last month, said it should be owned by the public "and not a private board exempt from public hearings, elections, etc."
Davis said there are advantages to public ownership. The city could obtain tax-exempt loans, which would help keep rates low. And it could distribute the water through a system larger than the company's, ensuring certain areas of town wouldn't suffer from depressed land values because they had no water.
He also said a city buyout could keep other interests - like neighboring Sandy - from buying up Draper Irrigation stock and diverting the water. In a bidding war with Sandy, one wealthy resident in recent years paid almost $1,000 a share to keep the rival municipality from buying a block of stock that was for sale.
The market price for Class A shares in the water company is between $300 and $350. Nine people own about a third of the company's 3,348 shares; the rest is divided among about 600 others. Many shareholders live outside Draper, and the city - consistent with its long-term goal of owning the company - recently bought its first 40 shares and plans in the near future to obtain another 80.
The City Council seems prepared to force Draper Irrigation to play ball. It informed directors of the company that two substantial new housing developments will be granted city water hookups rather than ties to Draper Irrigation. The private water company needs the 200 homes in those subdivisions to help pay off its $7 million loan.
Campbell said that rather than take the case to court, the city wants an "amicable solution."
And Noel Ennis, president of the water-company board, said that out of respect for the community spirit that has driven Draper Irrigation for more than a century, that's what he wants, too.
"It's been a civic responsibility for years," he said. "In a situation like we've got here, you always need to work things out."