Phoenix City Council to Discuss Proposed Water Rate Increase on Wednesday

Main entrance, with fountain.

Flickr photo by sea turtle

Phoenix City Council is taking public comments on the water rates proposal (see below) and will be discussing the issue at 3 pm on Wednesday, February 23rd.

The meeting will be held at City Council Chambers, 200 W Jefferson St.

Proposed Water Rate Increase Overview

[Source: City of Phoenix]

Priority:

To provide safe and reliable drinking water to Phoenix businesses and 2.3 million residents – a critical public health issue.

Need for proposed 7 percent water rate increase:

  • Debt service to repay more than $1 billion in bonds issued in last five years for projects already completed
  • Maintain AAA credit rating, which saves taxpayers money on interest
  • New unfunded, federally mandated requirements

— $200 million – Safe Drinking Water Act
— $15 million per year in related operating expenses

  • Over the last 10 years, for every million gallons of water produced, chemical costs have increased by 493%; electricity costs by 68%; and raw water costs by 41%
  • Proposal increases average water bill by $2.21 per month
  • No increase in wastewater rates; 4.4 percent combined increase

Water Services has instituted significant cost cuts and generated millions in revenues:

  • Reduced water and wastewater capital budgets by $621 million – delaying, reducing and eliminating lower-priority projects
  • Cut operating budget by $10 million; eliminated 25 percent of management position
  • Raised $4.5 million per year by selling reclaimed water to Palo Verde Nuclear Generating Station; $30 million region wide over four years
  • Collecting $5 million/year with new late payment fees; sold land assets for $2.1 million
  • Contracting with private sector for bill-payment processing, capital construction, and pipeline repair projects

Water Services employees:

  • 803 employees – just 17 percent of Water Services Department budget is personnel costs
  • Responsible for operating, maintaining and repairing 540-square-mile system, including six water treatment plants, 7,000 miles of pipeline, 50,000 fire hydrants, and customer service needs for 403,000 water accounts
  • Lowest number of employees per capita in 10 years
  • Funding rate increase solely through personnel costs requires cutting approximately one-third of Water’s employees

Comparison to other water providers:

  • Phoenix’s water and  wastewater average family costs are sixth-lowest of 20 largest U.S. cities
  • Phoenix’s rates are third-lowest of 11 large, southwestern cities and lower than most Valley water providers

Costs of not implementing water rate increase:

  • Risk of losing AAA bond rating; leading to higher borrowing costs and larger shortfalls
  • Capital funds for rehabilitation and replacement programs would need to be reduced, which may lead to decreased levels of service, increasing risk of system failures
  • Significantly higher rate increases will be needed in future years to maintain system

Additional information:

The Phoenix City Council will consider the water rates proposal at 3 p.m. Wednesday, Feb. 23, at City Council Chambers, 200 W. Jefferson St.

View a video on water rates

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About Yuri Artibise

I am a community driven policy analyst, community engagement practitioner and social media specialist.

Posted on February 21, 2011, in City Hall, Meetings, Sustainability and tagged , . Bookmark the permalink. Leave a comment.

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