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He turned to Pinal County government for help. County supervisors awarded Johnson Utilities a 30-year contract to supply water, shutting out a competing water supplier that had raised concerns about Johnson.
The deal's lead supporter was Pinal County Manager Stanley Griffis.
Pinal County officials backed Johnson Utilities despite a sketchy track record that included 25 DEQ violations the previous year.
That year -- 1999 -- according to DEQ records, Johnson was cited for having "major deficiencies" in the drinking-water system he provided to the Johnson Ranch area, which, at the time, was serving more than a thousand homes and now serves about 4,000 homes.
According to DEQ, Johnson's company had failed to provide required water quality tests, failed to notify the state within 24 hours when tests showed contamination, operated a new well without approval and didn't submit a required emergency operations plan. Also, Johnson Utilities failed to notify residents that some water in the area was contaminated with coliform bacteria and high nitrate levels.
Johnson was ultimately fined $10,900 for the violations; the next year, DEQ announced the violations had been corrected.
On May 10 of that year, Johnson had to sign a consent agreement with DEQ that acknowledged that he failed to build the Johnson Ranch wastewater collection system to the specifications approved by the department.
In comparison, the other utility, Diversified Water, and its owner, Scott Gray, were well known for strict adherence to state environmental regulations in any work to be done in the area. Gray himself had led fights against wildcat subdivisions in the region because they often brought inadequate water systems into the area.
In an April hearing, Corporation Commissioner Marc Spitzer summed up what Johnson and Pinal County officials were attempting to do with the creation of the Skyline District:
"With respect to compliance with DEQ, the first reaction we get [from Johnson and Pinal officials] is, Well, maybe we can just have a Pinal County Board of Supervisors create and district and oust the commission's jurisdiction and resolve the issue that way," Spitzer said.
Griffis did not return phone calls about his relationship with Johnson. But records show Johnson is close to the Griffis family.
In 2002, Griffis' son, Jeff Griffis, went to work for Johnson Utilities as a cable technician.
And George Johnson gave Griffis' daughter, Michelle, a valuable piece of property.
According to a deed filed with the Pinal County Assessor, on October 31, 2002, George Johnson and his wife, Jana, turned over ownership of Lot 22 of Johnson Ranch Unit 1 to Michelle Griffis, Griffis' single daughter.
According to the deed and state law, the value of the property did not have to be recorded if the property is a gift.
Other similar lots in the development cost an average of $40,000.
The troubles around Johnson Ranch continue.
Last April, DEQ fined Johnson's company an unprecedented $80,000 for failing to receive approvals to build and operate a newly constructed water system to serve the Sun Valley Farms housing development near Johnson Ranch.
Johnson's water activities around Johnson Ranch also brought him a $90,000 fine from the state Department of Water Resources, the department's largest fine ever.
"They went out and drilled three illegal wells and began pumping without any groundwater rights at all," says Doug Dunham, manager of the department's Office of Assured and Adequate Water Supply. "And it was just odd. My guy went out there and saw these three little sheds and said, Hey, what are those?' And they were just like, Uh, we don't know.'"
Even now, the Department of Water Resources is still trying to figure out a massive discrepancy in Johnson's reports regarding water usage in the Johnson Ranch area.
Johnson is required by state law to recharge groundwater in the area -- he must put back as much water as he takes out.
Records show, though, that in the last three years, he's actually taken about 294 million more gallons than he's returned.
For each of the last three years, according to reports filed with the Department of Water Resources, Johnson's company has pulled 2,336 acre-feet of water from the aquifer beneath the area.
However, the company reported that it used only 2,061 acre-feet in records filed with the Central Arizona Groundwater Replenishment District.
Johnson must pay the replenishment district for the amount of water he pulls from the aquifer. The district then buys water on the spot market for Johnson and pipes it to one of the water farms located throughout the Valley where it is released and allowed to seep back down into the aquifer.
The idea is that to save Arizona's already depleted groundwater, new developments must replenish the aquifers with water they purchase from somewhere else -- usually the Central Arizona Project canals leading into the Valley -- at the same rate they pull water out.
His underreporting to the replenishment district means that, at current water prices, Johnson's company underpaid the district an estimated $70,000.
But Dunham is more concerned that Johnson is depleting critical groundwater supplies when he promised he wouldn't.
"Our concern is that they're currently mining hundreds of millions of gallons of water without replenishing it to the aquifer," he says. "That's a clear violation. We must get that fixed as quickly as possible."