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]
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
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.