December 11, 2015
After three years of no rate increases, city officials say water and sewer infrastructure needs maintenance
Phoenix officials say the days of residents seeing no rate increases in their water bills could be over.
After three years of flat water and sewer utility rates, City Council members are expected to vote on proposed rate hikes at a public hearing Jan. 6. If approved, the average Phoenix residential customer would pay about $1.59 more per month next year. It could be the first of multiple-year increases.
Water Services Department Director Kathryn Sorensen said water- and sewer-rate increases are needed so the city can maintain its sprawling utility infrastructure, particularly thousands of miles of aging water pipelines. Other costs, including chemicals, electricity and raw water, also continue to grow, officials said.
"Rest assured, the driver of the need for a rate increase is infrastructure," Sorensen told City Council members recently. "Our operations are efficient, but our costs are increasing."
But the rate hike could face vocal opposition from some residents and council members. The council voted 5-4 last week to advance the proposal and hold a public hearing.
Councilmen Bill Gates, Sal DiCiccio, Michael Nowakowski and Jim Waring voted against advancing the plan. Mayor Greg Stanton and council members Kate Gallego, Laura Pastor, Daniel Valenzuela and Thelda Williams voted yes.
What an increase means for residents
The city has not increased water and sewer rates since 2013. City officials said Phoenix kept rates flat primarily by drawing down reserve funds that had higher balances and refinancing bonds to save money. However, they said, the city needs to begin investing more in its utility systems.
Phoenix delivers water to about 1.5 million customers every day. The hike in sewer and water rates, a 2.6 percent increase when combined, would bump the average residential bill to about $59.77 per month, according to the city.
If approved by the council, the rate increases would take effect March 1. Council members also indicated they would consider approving a 2 percent increase for 2017; the city has projected additional rate hikes could be needed every year through 2021.
Where two council members stand
Waring said he likely will vote against the increase, but he expects it will pass by a narrow margin. He said large, unnecessary water-rate increases were commonplace until several years ago, when some council members began asking tougher questions.
The councilman said a string of incidents that came to light this past year, including payroll errors and a furor over airport flight-path changes, has heightened the climate of skepticism at City Hall.
"We're not going back down the same road where citizens can expect really large (water rate) increases," Waring said. "I was a skeptic before. I'm even more of a skeptic now given the year we've had."
Meanwhile, Williams said the increase shouldn't come as a surprise. She said council members knew that a freeze in rates was temporary because the city eventually would need to rebuild financial reserves to maintain its perfect water-bond ratings and replace more pipeline.
“This council made a decision not that many years ago that we would take down the reserve in lieu of raising rates," Williams said. "And I just want the council to understand the consequence have come due. It is time to pay the piper."
A public hearing on the proposed rate increase will be held at 2:30 p.m. Jan. 6 at the City Council Chambers, 200 W. Jefferson St.