Mesa plans utility rate hikes - East Valley Tribune: News

Mesa plans utility rate hikes

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Posted: Friday, March 14, 2003 8:33 am | Updated: 1:05 pm, Thu Oct 6, 2011.

Mesa is moving to charge more for virtually every utility service it provides residents — a decision prompted by the city’s ailing budget.

Under a proposal set to be made public next month, Mesa would raise rates between 3 percent and 6 percent for city electric, gas, water, trash and sewer service.

Sewer rates would go up 6 percent, gas and water rates 5 percent, and electric rates 3 percent.

The proposed increases are expected to generate $8 million in fiscal 2003-04, which begins in July, said Jamie Warner, Mesa’s budget director.

Utility rate hikes must be approved by the City Council.

If approved, rates would go up starting in August, Warner said.

Mayor Keno Hawker said Thursday the proposed rate increases may be too high.

"My goal is to try to lock that in closer to rate of inflation and not use it as a budgetary tool to balance the budget," Hawker said.

Talk of rate increases came during a council study session Thursday as city budget officials painted a bleak picture.

Mesa is considering eliminating up to 400 jobs and cutting a host of city services, including many parks and recreation programs, to overcome a projected $31 million deficit for fiscal 2003-04.

"I have never seen a budget year with this many challenges," said Hawker, who has served all but four years on the council since 1986. "We’ve never had a year where retail sales have been flat. There’s been no increase."

Mesa is putting together the next two years’ budgets.

The city raised some utility rates in May. Residents who rely on city utilities saw an average increase of nearly $6 a month for the combined rate hikes. The city has not calculated how much the average bill would increase under the new proposal.

Electric rates have not been raised since 1993, Warner said. The city operates an electric company that serves the downtown area. Gas, water and trash rates have been raised every year since 1998. Sewer rates have been raised every year since 2000.

"They’re within the range of what we’ve seen historically," Warner said.

Mesa, which does not have a property tax, relies heavily on utility revenue to pay for services. Utility revenue accounts for 41 percent, or $221 million, of the $543 million operating budget. The budget figure does not include revenue from the half-cent "quality of life" sales tax. With that included, the city’s operating budget is $630 million.

"Our utility excess revenues are used at this point to offset the revenue a property tax could provide," Warner said.

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