Title
Notice of Intention to Consider Increases in Water Rate Revenues and/or Rate Components and Set Public Hearing Date to Consider Proposed Increase
Description
In accordance with Arizona Revised Statutes, section 9-511.01, request the City Council adopt this notice of intention to consider increases of up to 26 percent in water rate revenues and/or rate components over the next two fiscal years, to consider a decrease in the base allowance of cubic feet of water included with service, and set a date for a public hearing to consider the proposed rate revenue increase.
THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.
Report
Summary
In accordance with Arizona Revised Statutes, section 9-511.01, the City Council announces its intention to consider increases in water rate revenues and/or rate components over the next two fiscal years and set a date for a public hearing to consider the proposed rate revenue increases.
Rate revenue increases are identified in the Water Services Department’s Financial Plan as necessary to generate revenue required to maintain the reliable and cost-effective water services and invest in the future of the City of Phoenix. The rate revenues proposed will offset financial pressure imposed by substantial increases in costs to supplies and materials due to inflation and maintain an adequate fund balance to retain a AAA bond rating. A water rate revenue and/or rate component increase will be considered that may total up to 26 percent for water to be effective over the next two fiscal years. Decreasing the base allowance of cubic feet of water included with service will also be considered. The following was provided to the Transportation, Infrastructure, and Innovation Subcommittee for the proposed rate revenue increases in FY2024 and in FY2025, shown below:
- Water rate revenue increases of 6.5 percent effective October 2023, 6.5 percent effective March 2024, and 13 percent effective March 2025; and
- Decrease the allowance to 800 cubic feet in the summer months and 500 cubic feet in the non-summer months from the current level of 1000 cubic feet in the summer months and 600 cubic feet in the non-summer months.
The water rate revenue and/or rate component increases will apply to all water service customers served by the City of Phoenix.
The City Council sets June 28, 2023, at 2:30 p.m. in the City Council Chambers, 200 W. Jefferson St., as the time and place for the public hearing to receive public comment on the water rate revenue and/or rate component adjustment proposal. The City Council may act to adopt the proposed adjusted water rate revenues and rate components upon the conclusion of the hearing.
Information detailing the proposed adjustments to the water rate revenues and rate components, Financial Plans, and the Five-Year Water Capital Improvement Program will be available to the public at least 30 days in advance of the public hearing. The information will be available 30 days in advance of the public hearing on the City of Phoenix Water Services Department website: https://www.phoenix.gov/waterservices. The information will also be available to the public at least 30 days in advance of the public hearing in person at the City of Phoenix City Clerk Department, located at 200 W. Washington St., 15th floor, during normal business hours.
Concurrence/Previous Council Action
On Jan. 26, 2023, the Citizens' Water/Wastewater Rate Advisory Committee recommended:
- Water rate revenue increases of 6.5 percent effective October 2023, 6.5 percent effective March 2024, and 13 percent effective March 2025; and
- Decrease the allowance to 800 cubic feet in the summer months and 500 cubic feet in the non-summer months from the current level of 1000 cubic feet in the summer months and 600 cubic feet in the non-summer months.
- On Feb. 15, 2023, the Transportation, Infrastructure, and Innovation Subcommittee:
- Heard information on the proposed rate revenue increase that included updates on the financial plans, inflationary pressures, and advanced water purification.
Public Outreach
The Water Services Department will be conducting public outreach through in-person and virtual community meetings, social media, and online outreach in the months of March, April and May 2023.
Department
Responsible Department
This item is submitted by Deputy City Manager Ginger Spencer and the Water Services and Finance departments.