For the second time, the Board of Supervisors voted to delay a vote on raising county sewer rates by 4 percent.
The board unanimously decided Tuesday to hold off until a draft report on sewer rates is completed by a contractor, which wastewater department director Jackson Jenkins said should be by March or April.
“To me it doesn’t make much sense to increase rates at all until that study is completed,” Supervisor Steve Christy said, adding that it “will have a bearing” on whether he supports a rate change.
County officials say three 4 percent rate increases in coming years are necessary to address declining revenues and rising costs, as well as to stave off potentially serious financial consequences. Last year the wastewater advisory committee voted to recommend a single increase and wait on the others until the study cited by Christy was complete.
Rates were last raised in 2013 when they jumped 10 percent, the last of a sustained series of sizable increases to service massive debt issued to pay for a new wastewater treatment plant and major upgrades to another — work that cost around $700 million, making it the county’s largest public works project ever.
Jenkins said the study, which will cost around $100,000, will focus largely on connection fees and “could determine that it looks like it’s appropriate or not appropriate for a connection fee increase.”
The 4 percent hike would increase the average residential customer’s monthly bill by about $1.63. The average residential ratepayer now pays nearly $41 per month for just shy of 6,000 gallons, according to the county’s website. That’s pretty close to average for such bills among residents of the country’s 50 largest cities, according to a 2013 study commissioned by the San Antonio Water System.
The county’s finance director, Keith Dommer, told the board that without increases in the near future, cash reserves would fall “alarmingly quickly” and be nearly depleted by 2020. The wastewater department’s debt service ratio, a metric used by bond rating agencies to evaluate financial health, would also fall below 1, which means that its funds are insufficient.
At a Jan. 26 meeting of the advisory committee, Dommer told Christy that sewer rates could stabilize or begin falling by fiscal year 2025, though he cautioned that “there is no prediction for what the future holds,” according to meeting minutes.
GOLDWATER APPEAL
On a 3-2 vote, the supervisors also opted to appeal a recent Superior Court judge’s decision to void the county’s deal with the space balloon company World View. The original four-count lawsuit was brought last April by the conservative Goldwater Institute, which alleged the deal violated state statute, county ordinance and the Arizona Constitution’s gift clause.
In October, Goldwater asked a county judge to “declare (the lease) invalid” for running afoul of state law regarding appraisals, auctions and rental rates and in her ruling last week, Judge Catherine Woods did just that.
Christy joined Supervisor Ally Miller, a longtime critic of the World View deal, in voting against an appeal.
In early 2016, the Board of Supervisors agreed to build a launch pad and headquarters worth nearly $15 million on behalf of World View and issue debt to pay for it. Those facilities were recently completed, and the company has moved in and begun operations near Tucson International Airport.
Explaining his vote, Christy said he would prefer the county try to “resolve” the issue with Goldwater, rather than “jumping right into a legal remedy,” which he said would be costly and have no “guarantee of resolution.”
“I think the best thing we could do is to try to make some kind of overture to the Goldwater folks to see if there is something that we can do to remedy the situation that satisfies them and allows World View to continue,” he said.
Miller said she agreed with Woods and Goldwater that state law requiring appraisal, competitive bidding and minimum lease prices applied in this case. In court filings, the county acknowledges that statute but says its authority to pursue the deal with World View comes from another statute that grants counties broad economic development authority.
“It is a conflict between one statute and another statute,” Supervisor Ramón Valadez said, adding later: “I still support this deal because I still believe that nothing inappropriate was done.”
In response to questions about the appeal, Jim Manley, Goldwater’s lead attorney, told the Star “it’s disappointing that they are going to continue to drag this out, rather than simply complying with the law and doing right by the taxpayer.”
