Mesa weighs raising utility rates, already among Valley's highest

The city of Mesa is considering small rate increases at all city-owned utilities in order to cover increased operating expenses.

The increases will affect Mesa residents who use city-owned water, wastewater, solid waste, electric and gas services.

The rate increases are necessary to accommodate increased operating costs, according to a report prepared by Office of Management and Budget Director Candace Cannistraro.

According to projected utility revenues and expenses, the city will need to generate an additional $252,000 for electric, $474,000 for natural gas, $3.9 million for water, $2.7 million for wastewater, and $1.7 million for solid waste.

The increases include a 3.5 percent increase in solid waste on all residential pickups, bulk items and appliance collection. In effect, that would result in a $1.01 increase per month for 90-gallon black barrels and a $0.90 per month increase for 60-gallon black barrels.

Residential water customers can expect a roughly 3.5 percent increase under the proposed rates. The average water user with a monthly consumption of 9,000 gallon would see a monthly bill increase of $1.62, to $47.95 from $46.33.

Most wastewater customers would see a four percent increase on their bills if the new rates go into affect, including a $0.75 increase in the service charge and a $0.40 increase in the usage charge for average consumers.

The proposed rates also would raise the service charge for residential electric customers by $1.75 to $12.50 but would leave the usage charge unchanged.

Similarly, the proposed rates include raising the service charge for natural gas customers by $0.75 but leaving the usage rates unchanged.

Mesa residents pay higher water, wastewater and solid waste rates than many of their neighbors in the Valley. The average Mesa homeowner paid $559 for water and $355 for solid waste pickup in Fiscal Year 2017/18, which were both the most expensive rates paid by residents of the seven largest cities in the Valley, according to a city presentation.

Mesa residents paid $349 for wastewater services in the same period, which ranked second behind Glendale’s total of $386.

The city report pointed out that the monthly bill for average water users in Mesa after the rate change would be $47.95, which is less than the $50.37 that same user would pay with SRP.

Similarly, according to the Mesa report, for average electric customers “the proposed increase results in an annual cost approximately 18.4 percent less than if served by SRP.”

Overall, Mesa had the third highest average homeowner annual cost – which includes solid waste, wastewater and water rates along with primary property tax, secondary property tax and city sales tax.

Mesa’s average homeowner annual cost for Fiscal Year 2017/18 was $1,893, which ranked behind Tempe ($1,907) and Glendale ($2,192), according to the city presentation.

The City Council adopted the Notice of Intention to adjust utility rates at its meeting on March 19 and set May 21 as the date for a public hearing on potential rate raises.

The city report recommended that the rates go into effect on July 1.

The consideration of the rates hikes comes just weeks after the Mesa City Council approved a plan to fund the construction of a building for ASU in the city’s downtown using utility revenues reserved for economic development.

However, the city’s decision to move forward with the ASU project had no influence on the rate hikes and the close timing of both announcements is coincidental, according to multiple city officials.

Speaking on behalf of Mesa’s water and wastewater utility, MacDonald said. “The decision to propose rate adjustments this year was based on increased operating expenses for the utility.”

She added, “Typically, rate adjustments are proposed each year to the Mesa City Council based on the current and projected needs of the city. The City Council votes on any proposed rate adjustments once a year during the budget approval process.”

Mesa Mayor John Giles, who previously stated at a council meeting on February 26 that he would not be interested in the ASU project if it required a utility rate increase, echoed that sentiment.

“The proposed ASU project downtown will not cause the need to raise utility rates,” Giles said. “The upcoming discussion about a potential raise in rates is in line with previous years’ forecasts.”

– Reach Wayne Schutsky at 480-898-6533 or wschutsky@timespublications.com.

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