Ashley Valley Water and Sewer Improvement District (District) recently filed suit against Ashley Central Irrigation Company (Central Irrigation) for a breach of contract the parties entered into in 1983.  In the contract it was agreed that shares of Central Irrigation could be turned into the District for culinary use and that those shares would be assessed on an equal basis to the primary shares in Central Irrigation.

Central Irrigation has disregarded this contract, altering its by-laws by creating an M (municipal) Class of stock that can be assessed at a different rate than primary shares.  The M Class of stock applies to Central Irrigation shares turned into the District for culinary connections, with Central Irrigation making it clear it intends on assessing the District up to 5 times the assessment of Central Irrigation primary shares, using this money to publicly subsidize improvements to a private irrigation system the District does not even use.  The District will not allow Central Irrigation to unfairly assess culinary users for a disproportionate share of Central Irrigation’s operating costs, especially where there is an agreement in place prohibiting Central Irrigation from doing so.  

The lawsuit contains additional claims against Central Irrigation for unfair billing practices directed at placing operating costs that belong to all of Central Irrigation’s shareholders squarely on the backs of the culinary users.  The District has paid assessments under protest and is seeking a refund of these payments.

The District has attempted to resolve these issues with Central Irrigation without success. Because of this the District will not accept shares from Central Irrigation for culinary connections until Central Irrigation honors its contractual obligations.  The District seeks to have the judge uphold the District’s right under the 1983 agreement to insist shares held by or turned into the District will be assessed equally to primary shares in Central Irrigation.