Tucson Water has submitted three plans for the Tucson City Council to consider outlining annual water-rate increases during the next four years.
The leading proposal, recommended by the Citizens’ Water Advisory Committee, would gradually raise typical city water bills by a total of 27 percent from fiscal 2019 to fiscal 2022.
The plan recommended for approval would increase water rates by 6.9 percent for single-family residential customers, the largest customer base of Tucson Water, next fiscal year, with smaller planned increases the following three years. The proposal also includes increases in the base rates and an increase in the cost of reclaimed water. Other classes of water users, such as commercial, industrial and multi-family, would also see rate increases under this plan.
If the plan is adopted by the council in the coming months, the average customer using about 6,000 gallons a month will see an increase of about $2.69 per month on their water bill or a monthly bill averaging $37.17, according to the city. If approved, the new rates would become effective in July.
The other proposals call for single-family water rate increases of 8.6 percent and 7.3 percent.
The water rate increases are needed to allow Tucson Water to increase water sales revenues during the next five fiscal years, starting with a 6.8 percent increase in revenue for the upcoming fiscal year. This financial plan, with subsequent smaller water sale revenue increases through fiscal year 2023, is needed to allow the utility to ensure water system reliability, capital improvements, purchase the city’s allotment of Central Arizona Project water and provide for future operations.
The 6.8 percent increase in water sales revenue, which includes the higher water rates, will provide nearly $14 million in additional revenue next year for the utility, according to the advisory committee’s memo.
The proposal also seeks to make adjustments to its limited-income assistance program, waiving the monthly water service base rate as well as providing the first 1,500 gallons of water used on a monthly basis. Currently, qualified low-income participants receive a 50 percent discount on their monthly water bills.
About 4,500 customers are in the low-income assistance program as of December 2017, according to a memo from the Citizens’ Water Advisory Committee.
On Tuesday, the council signed off on a series of town halls inviting the public to comment on the three competing proposals, but the proposed increases have already drawn criticism from several council members. The dates and times for the town halls have not been determined.
Councilwoman Regina Romero was critical of the need to sign off on year-over-year increases in customer rates that would continue until 2022, arguing that it is incredibly difficult to forecast the cost of water five years from now.
She told her colleagues that she would prefer a plan that would only approve increases for the next two fiscal years.
But that was not her only concern. She complained that her ward office was able to sign up more people for the limited-income assistance program in a single day than Tucson Water did in an entire year.
Her biggest complaint, however, goes back to a decision the council made two weeks ago by offering up to $2.5 million a year in incentives to help build water pipelines and other water infrastructure needed by qualifying new nonretail employers. Romero was the lone vote against that proposal.
On Tuesday, she argued that Tucson Water customers shouldn’t have to shoulder the cost of these incentives with rate increases.
Councilman Paul Cunningham rejected Romero’s argument, noting the water infrastructure incentive program requires private businesses to put millions of dollars into the project before they would qualify for even a portion of the water incentive.