The Pima County Board of Supervisors will decide Tuesday whether everyone’s sewer bill goes up, and what to do — if anything — about a $2.7 million sewer bill county officials say Davis-Monthan Air Force Base owes.
The county said the 25-year-old bill stems from years of nonpayment by D-M of connection fees, which are paid when new development occurs.
Between 2009 and 2013, the county aggressively pursued the bill, and even contemplated a lawsuit. Since then, officials have expressed a willingness to defer to the base’s legal position on the fees, specifically that they constitute a tax, which local jurisdictions cannot assess on federal agencies.
Now county officials want the supervisors to decide how to handle the situation.
“They’re the decision makers,” said County Administrator Chuck Huckelberry. “We’re taking it to them, and saying, ‘OK, we’ve been kind of dancing around the maypole here long enough. What do you want to do?”
At least one supervisor, Richard Elías, thinks D-M should probably settle up.
“When these kind of mistakes happen or when these kind of problems arise, they need to be resolved,” he said. “In this particular case, the ratepayers of Pima County have been subsidizing those users there at the (base). Somehow I feel that needs to be made right to the ratepayers.”
He said his position is not intended as a criticism of the base, which he said “is critical to all of us.”
Supervisor Steve Christy declined to comment on the matter, pointing out that it is to be discussed in executive session Tuesday. Supervisor Ramón Valadez said he is still considering the matter, but said whatever action is taken should be “truly in the best interest of our community.”
Valadez also said he was considering making public privileged attorney-client material so that whatever decision is made Tuesday is easier to understand.
Supervisor Sharon Bronson said she’s “fairly convinced that our ability to prevail in the courts is slim” if the county were to sue the base over the bill, and that it’s best to just “sit down and work this out.”
“What’s past is past,” she added. “We need to determine our relationship in the future that is equitable to all.”
Supervisor Ally Miller did not respond to a request for comments.
In a March 16 letter to Huckelberry, deputy base engineer Michael Toriello said the Air Force is “unaware of any uncompensated impacts to the county’s wastewater system that are being caused by (the base’s) wastewater discharges.”
The letter went on to say that readings from a new wastewater metering station installed in collaboration with the county indicate the base may have even been overcharged before the meter was used for billing purposes.
If the county still feels the base owes it something, the Air Force is “willing to consider discussing those impacts the county can demonstrate through substantiating information,” the letter concluded.
“We will continue to pay for our impact, as we always have, and look forward to continuing our great communication and partnership with Pima County,” base spokeswoman Lt. Sydney Smith said in written comments. Smith also said data from the new meter station was intended to help “accurately … compensate the county based on those metrics.”
A legal analysis provided to the supervisors by the county attorney’s office included previously unreported details about the dispute, among them the fact that the base also refused to pay monthly user fees from 1975 until 1988, when a settlement agreement between the county and base averted another possible lawsuit. Under the terms of the agreement, the base paid user and connection fees and through 1993, when it stopped paying the latter for reasons officials say are unknown.
The memo also reveals that the connection fee issue was raised by the county as early as 2005, not 2009 as other documents previously obtained by the Star indicated, meaning that more than a decade has passed since the issue was discovered without resolution.
SEWER HIKE
After two previous delays, the supervisors consider a single 4 percent increase in the wastewater user fee, along with a 2.6 percent increase in connection fees.
The user-fee hike would increase the average residential customer’s monthly bill by $1.63, according to county estimates. The one-time connection fee, which is paid on new developments or after remodeling that requires additional or larger water meters, would increase to $4,172 for residential customers. The current rates, including a service fee of $12.63 and base volume fee of $3.52 per hundred cubic feet, have been in place since 2013.
Elías pushed for a connection fee hike along with a user-fee increase so that developers share in the burden of rising utility costs.
In February, the supervisors voted to delay the vote pending the release of a preliminary rate structure study conducted by Raftelis Financial Consultants, which was provided earlier this week.
The study, though not directly addressing the rate increase up for a decision, indicates the current user fee rate structure charges many commercial customers significantly less than the strength of the sewage they create merits. To address this, the company suggested several simpler alternatives with fewer industrial and commercial classes that would capture more revenue.
The alternatives also propose higher fixed fees to address declining volume-based revenues due to water conservation. Those changes would result in higher monthly bills for most residential users, though the highest hikes are $1.53 per month in two of the alternatives.
Jackson Jenkins, wastewater director, said any adoption of a new rate structure, which does not have to be one of the Raftelis alternatives, is likely many months off and would require a vote from the supervisors. He pointed out that the report isn’t even finalized, and Amber Smith, chair of the wastewater advisory committee, said she and her colleagues still have questions and concerns about it.
As to the rate hike on the agenda Tuesday, the four supervisors who returned calls from the Star expressed concerns about the potential impact of the hikes to constituents, especially those who are low-income or on fixed incomes.
County officials said three 4 percent hikes are necessary to stave off potentially serious financial consequences at the wastewater department, including dwindling cash reserves and potential legal issues with lenders.
The advisory committee recommended just one of those hikes last year, citing the ongoing Raftelis study.
After meeting with wastewater officials and advisory board members, Christy said he’s not convinced that the hikes, especially the connection fee increase, are necessary.
“If things turn into the doom and gloom scenario being presented by some folks, we can take a look at it,” he said, adding that the board needs to monitor the situation.
“Obviously, we want to minimize any rate increase, but at the same time maintain the system in good working order,” Bronson said, adding that the board normally follows the recommendations of the advisory committee.
She left open the possibility of a smaller rate increase, or delaying any increase until the study is completed.
