Paradise Valley hatches plan for wastewater fee increase

The Paradise Valley Town Council met in study session May 26 to discuss the wastewater rates increase to be voted on June 9.

The increase in rates — which only effects about 2,100 residents — comes as a result of years of operating at a structural deficit, according to town officials. Now, the council is looking to increase rates by up to 10 percent for the next two years.

Depending on where you live in the Town of Paradise Valley determines what entity handles the wastewater leaving your home. Paradise Valley residents have three options: Use a septic tank, use town services if within a certain geographical area, or sign up for the city of Phoenix sewer service.

While the sewer fund costs should have been covered by its ratepayers, the amount has been coming up short for quite some time.

The town contracts out wastewater service with the city of Scottsdale through an intergovernmental agreement, but it is responsible for the billing and remittance, as well as for the local infrastructure.

The town last increased sewer rates in 2010 after supplementing the account in 2009 with money from the General Fund. In fiscal year 2014, the entirety of the sewer fund balance of $4.9 million was transferred to the General Fund to reimburse sewer-related expenditures.

Since, costs related to the operations and debt service of the sewer system have continued to exceed revenues.

This fiscal year, Paradise Valley Town Council is scheduled to transfer $650,000 into the sewer fund to cover debt service of $9 million for bonds issued in 1998.

The Paradise Valley sewer system includes 70 miles of pipe servicing 2,098 parcels while 1,531 parcels are served with a septic service.

The town publicly announced it would be increasing rates, stating the wastewater services will not exceed 10 percent per year, earlier in the calendar year.

During the May 26 study session Director of Administration and Government Affairs Dawn Marie Buckland and Town Manager Kevin Burke presented the council with their recommendation: include one more $650,000 General Fund subsidy and increase rates by 8 percent in fiscal year 2017; 4 percent in 2018; and 3 percent in 2019.

“Barring anything major coming out of those sewer system assessments, or any major increases in the city of Scottsdale rates, we would anticipate not needing any additional increases in 2020 or 2021,” said Ms. Buckland.

The minimum sewer bill is about $63 dollars, while the maximum bill is capped at $200.

The sewer rates pay for the Scottsdale IGA that provides operations and maintenance; capital improvements; repair and replacement and minimum reserves. According to Mr. Burke, the Paradise Valley sewer system has gone years without maintenance.

“We know that we haven’t been in this system for probably a decade, in terms of any capital repair or maintenance,” said Mr. Burke. “We also know that we got to get this fund structurally sound as quickly as possible before we start digging things up and making them better.”

The funds could be resolved in one year, if the rates were increased by 20 percent, stated town council member Paul Dembow.

However, state statue says the town must provide 60 days notice before increasing the rates, and the notice given by the town stated the increase would not exceed 10 percent.

“Is there a number that we could come up with as opposed to being the council of annual increases so that we could pull the Band-aid off?” asked Councilman Dembow.

After some discussion, the council landed at moving forward with the proposed rates of 10 percent in fiscal year 2017; 10 percent in 2018; and 0 percent in 2019.

“The 10 and 10 will achieve our goals faster than the 8-4-3,” said Mr. Burke.

The town will be accepting public comment during the June 9 meeting before the vote.

News Services Editor Melissa Rosequist can be reached by e-mail at mrosequist@newszap.com or follow her on Twitter at www.twitter.com/Mrosequist_

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