The Town Council voted in September to raise the town’s residential and commercial water and sewer rates, and add an environmental compliance fee, effective with the November bills.
The rate hike is the first in nine years from the town. The anticipated increase of about $9 to $10 for a single-family residence is dependent on the family’s individual usage.
City officials say the rate increased in response to staff projections showing the town beginning to lose money in the coming five years because the cost of providing water has increased.
The new rates will allow the town to absorb the higher costs and save for needed capital improvements at the end of that five-year cycle without an anticipated need for another hike in that time frame, town officials said.
“We don’t want to come off as trying to sneak some things [in] over multiple years and make them seem less noticeable,” Gilbert Water Resources Manager Eric Braun said. “We want to do this once, let the public understand it, go through the process one time and let them know we’re not going to be coming back year
Town officials said they have practiced belt-tightening measures for years to keep from increasing water rates.
The town has realized some savings, Braun and Budget Director Kelly Pfost said, by cash funding new equipment when possible to save on interest as well as negotiating with the federal government for less expensive hydroelectric power from Hoover Dam. Staff also said it has been able to keep maintenance costs in
check and by adding technology to increase efficiency.
However, town staff projects the water and sewer funds could be losing money within the next five years without an increase.
“We did see it coming, and then it finally comes to a point where you say, ‘we can’t wait,’” Pfost said. “We’ve got to start doing something, or we’re going to be in the red.”
The rising costs placing pressure on the town come primarily from three factors: energy to pump the water, chemicals to treat the water and maintenance to infrastructure.
Gilbert gets its water primarily from three sources: Central Arizona Project (Colorado River), Salt River Project (Salt and Verde watersheds) and groundwater. The water from the Central Arizona Project—which flows from the Colorado River—is increasingly more expensive to pump to Gilbert, Braun said.
“Half of the cost to deliver the water is energy to pump it here,” he said. “It’s coming up a couple of thousand feet in elevation. It’s heavy. It takes a lot energy to push it uphill, so that’s half the cost. The other half of the cost is operating and maintaining the canal system to get it here. Both of those costs have increased significantly since 2009.”
Once the water has made its way to town, Gilbert has additional costs to treat and deliver the water for residents and businesses to use.
“We have got treatment plants that we have to maintain, and as that infrastructure ages, it costs a little bit more,” Braun said. “We’ve got the energy to produce the water and then to pump it, too. … And then all of the chemicals and other commodities that we need to use to treat the water. Those costs also increase.”
That water requires more treatment than in the past, too, because of the wildfires in northern Arizona that have increased during the Southwest’s drought and decreased the water quality. Those fires have loosened soil, and with ground cover gone, it has allowed more sedimentation and ash to run off into the water, Braun said.
Because wastewater must be treated and faces the same treatment cost increases as drinking water, sewer costs are rising, too. A new environmental compliance monthly fee of $4.86 will feed a fund to pay to meet federal requirements on stormwater and air quality.
The rate increase proposal received some pushback from some homeowners associations and from some council members, though the council approved the measure 5-2 on Sept. 20. Council members Victor Petersen and Jared Taylor voted no.
Joe Bakas, who sits on the board of directors for Silverhawke homeowners association in northwest Gilbert, said he told the council he understood the need for the hike. However, he said he would have liked to have seen it delayed until January, when most HOAs start their budget year.
“I’m of course concerned because our goal and the goal of any of the boards is to well manage the money that’s coming into the association and try to manage to budgets,” he said. “...You’re creating an impact to people who budget on a yearly basis.”
HOAs pay for water features and water usage on common grounds, then pass the costs to homeowners in assessments.
Bakas said the timing of the increases makes the impact more acute because it is time for overseeding for winter lawns, requiring additional watering as seeds germinate.
Petersen said he was concerned there were inefficiencies in the water department that, if addressed, could further stave off a hike.
The town’s water production has increased with growth, and developers pay fees to accommodate the growth, but Petersen notes town staffing has increased faster than production. He said he has not gotten a good explanation as to why.
Petersen, who will leave the council at year’s end, said he still would like to see the discrepancy between staffing and water production addressed as it could potentially delay a future increase.
But he acknowledges that with the hike passed, the political will to do so may be gone.
“The idea of inflation is real,” he said. “I’m not denying that. And if the [full-time employee] numbers weren’t so disturbing and hard for me to explain, I wouldn’t be here complaining.
“People expect rate increases once in a while, but they also expect us to do everything we can to be as efficient as we can, and the metrics I’ve seen don’t convince me that we’ve done that.”