May 15, 2005
The Mesa City Council is looking at raising utility rates for gas, water, trash and sewer service.
The council plans to discuss a notice of intention to raise the rates at a meeting Monday.
That would be followed by a public hearing on June 20 on the proposed rate hike.
In the preliminary 2005-06 budget, city staff penciled in a 3 percent increase for water, sewer, gas and trash service to stay in line with overall inflation, City Manager Mike Hutchinson said.
No rate increases are being proposed for the city’s smaller electric utility next year, but there could be one in 2006-07.
A 3 percent increase in the other four would increase revenue by $4.6 million (revenue from Mesa utilities is projected to bring in $82 million this year).
But additional costs associated with a wastewater plant on 91st Avenue in west Phoenix and other projects are expected to increase the cost of having the utilities by another $11.4 million.
The 3 percent rate hike still balances the budget, Mayor Keno Hawker said, because the city is still in "debt valley," a four-year period of lowerthan-average interest payments on utility-related bonds.
Hawker and others on the council have suggested a higher rate increase could help forestall an expected budget crisis.
A 5 percent increase would bring in $7.7 million.
Councilwoman Janie Thom said she doesn’t support any rate increase, because the city needs to cut costs and change its priorities when "city streets are going to pot, literally, and they’re hiring 516 employees in one year when only about 70 retired."
The council’s vote last year to raise rates for gas, water, trash and sewer services by 4 percent to 6 percent triggered a petition drive for a referendum by the Valley Business Owners activist group.
The rates were implemented, but the referendum issue is pending in the state Court of Appeals.
A lower court sided with the city.
Meanwhile, the group has taken out paperwork for another voter initiative, which would require public votes on every utility increase.