Pima County won't fight higher rate plan for suburban Tucson Water customers

Pima County supervisors rejected a resolution this week to oppose Tucson Water’s plan to charge higher water rates in unincorporated areas. The resolution also would have authorized the county administrator to “support any legal challenges” against the city’s plan.

In early April, the Tucson City Council approved moving ahead with the plan to enact the differential water rate structure. The council will hold a public hearing during its June 17 meeting to approve the new rates.

If approved, the rates will take effect in early August, boosting rates by a range of 16% to 23% for Tucson Water’s customers in unincorporated areas of Pima County. That will result in a household in an unincorporated area paying on average $6.41 to $8.88 per month more than a typical household in cities or towns, according to Tucson Water. The average homeowner living in Tucson, Marana and other incorporated cities who are Tucson Water customers would see their bills drop an average of about $2 a month compared to what they would be paying under the current rate structure.

Tucson Water previously said it costs more to serve unincorporated areas because they need more pipes and other infrastructure per unit of water sold.

The county resolution would have given County Administrator Jan Lesher authorization to “do all things necessary to support jurisdictional rate parity for Tucson Water customers,” including reconsideration of an intergovernmental agreement and “support for any legal challenges” to the water rate plan.

The resolution was brought forward Tuesday by Pima County Supervisor Rex Scott, the board’s chair, who said the differential water rate plan is “inherently discriminatory and unfair” for residents in unincorporated areas of the county, who make up about a third of all Tucson Water customers.

“The ratepayers we represent in the unincorporated county have been disparagingly referred to as non-owners of the utility because they live outside the boundaries of the city. That is an insulting term to apply to your customers who have been helping the utility to grow and prosper for decades,” Scott said. “It is equally insulting to infer that these higher rates mostly target the affluent.”

“By adopting differential Tucson Water rates, the city of Tucson will end its commitment to serve as a regional water provider, but continue to maintain a monopolistic market for its unincorporated water customers who lack political representation,” Scott said.

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District 4 Supervisor Steve Christy, who supported the resolution along with Scott, said the differential water rates would discriminate against constituents living in unincorporated Pima County.

The resolution ultimately failed 3-2, with supervisors Matt Heinz, Jen Allen and Andrés Cano voting against it.

Allen said the resolution was far too confrontational and should be about regional governance and collaboration between the two bodies.

Cano said he doesn’t believe “that further litigation is a path forward” and urged the county’s legal teams and staff to instead “pursue dialogue, not division.”

“Our focus should be on regional collaboration, not courtroom conflict, and county taxpayers should not be footing the bill for legal disputes that strain relationships between our local governments, especially when the path forward lies in negotiation and shared planning,” Cano said.

Heinz said, while he does have concerns over how the rates were formed, that he doesn’t support “wasting taxpayer dollars in another lawsuit.”

The county sued a similar version of the plan in 2021. In that case a Maricopa County judge ruled the city’s differential rate structure wasn’t justified by an analysis of the costs of serving water to both incorporated and unincorporated areas.

A lingering issue was settled in early April when the Arizona Supreme Court issued an order denying Pima County’s request that Tucson be required to return to its unincorporated customers the $10 million it collected when differential rates were in place from 2021 to 2023.

Many Arizona cities, including Phoenix, charge suburban customers more than they charge customers living within city limits. However, in most of those cities, the utilities’ unincorporated customer base represents a small fraction of their total customer base. One reason the idea of a differential rate system has proven to be controversial here is that for Tucson Water, unincorporated area customers represent about one-third of its customers.