Syms seeks AG investigation into Phoenix sewer fee assessment practices

The drumbeat of local support is becoming amplified as a group of Paradise Valley residents continue their fight to gain fair and equitable sewer fee assessments from the city of Phoenix. (File photo)

Representative Maria Syms is calling upon Arizona Attorney General Mark Brnovich to investigate what a growing number of Paradise Valley residents believe to be an unfair — and potentially illegal practice: the assessment of sewer fees by the city of Phoenix.

The 71 homes within the Camelhead North Homeowners Association are provided sewer service by the city of Phoenix, but residents there say they are fed up with what many call “outrageous” sewer bills ranging from the hundreds to sometimes thousands of dollars.

A view of Phoenix City Hall, 200 W. Washington St., in downtown Phoenix. (File photo)

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.

Phoenix city officials last year told the Town of Paradise Valley Independent that its sewer fees for residential customers is based on a percentage of winter — January through March — water usage used to estimate sewage flows and calculate monthly bills.

A collection of Paradise Valley residents — it’s now estimated the issue impacts about 900 Paradise Valley property owners — have cried foul over how the city of Phoenix is assessing their sewer fees. Residents have met with both Phoenix and Paradise Valley officials to no avail.

“According to an outpouring of constituent accounts, the disparate rates charged between 2014 and 2017 amounted to more than $3 million in overcharges to Paradise Valley residents,” Rep. Syms said in her Nov. 17 letter to the Arizona Attorney General’s Office.

“Despite repeated requests form my constituents to provide complete comparative water usage and sewer charge information for its Paradise Valley and city of Phoenix customers, the city of Phoenix has failed to do so, and has, to date, provided only partial and inconsistent information.”

Stephanie Bracken, a Phoenix Water Department public information officer, explains outside-municipality customers are charged a 50 percent surcharge, which is allowable due to Phoenix Municipal Code 28-39.

“Premiums for service outside of the boundaries of a municipally-owned wastewater utility typically reflect the fact that customers within the city are effectively the owners of the utility, who must bear the risks and liabilities of utility ownership,” she explained in a Nov. 28 statement to the Independent.

“Other Valley cities — Chandler, Mesa, and Scottsdale, for example — employ surcharges on outside-city sewer customers that vary between 15 percent (Scottsdale) and 60 percent (Chandler). Some valley cities do not employ such a surcharge.”

Ms. Bracken says the city of Phoenix’s position is the municipality is assuming the liability of an investor-owned utility.

“If a municipality provides service to outside-city customers, it assumes some of the characteristics of an investor-owned utility, and may incur substantial risks in making this investment, including business risk such as tort liability and civil penalties, interest rate risk, financial risk and liquidity risk,” she explained.  “Premiums charged to outside-city customers represent a rate of return intended, in part, to recognize the inherent risk factors involved in developing infrastructure and delivering service to outside-city users.”

Rep. Syms disagrees and points out Arizona Revised Statutes speak to the idea that all sewer fee charges — withing municipal bounds or not — “shall be just and reasonable.”

“The city of Phoenix should not be permitted to gouge utility ratepayers simply because they are non-residents and disenfranchised from voting for Phoenix city councilmembers,” Rep. Syms said.

‘We’re not going anywhere’

Two Paradise Valley residents say they and their fellow neighbors are remaining steadfast to their assertion sewer fees are unjustly determined by the city of Phoenix.

“If they are charging rates that are either unjust or unreasonable they are prohibited and unlawful,” said Paradise Valley resident Gary Keltner, in a Nov. 28 phone interview. “There is a threshold issue where the city is not acting pursuant to its own ordinances and not in compliance with state statute.”

Mr. Keltner says there are 927 Paradise Valley homeowners who receive sewer service from the city of Phoenix. Only 337 receive sewer service only, while the remaining are provided both water and sewer services.

“Phoenix residents pay an average of $20.71 while Paradise Valley residents are routinely charged over $100 most months — we are paying five or six times more,” he said. “For those 337 residents based on some calculations I did, it would have come out to be about $1 million dollars over a three-year period.”

Mr. Keltner said he examined the last three year’s worth of bills collected from Paradise Valley residents who only receive sewer service from the city of Phoenix.

“They have not demonstrated for any reason why it costs more to serve us then it costs to serve everyone else,” he said of his data collections and examination. “In any event, this is an effort to subsidize the Phoenix sewer system on the backs of Paradise Valley residents.”

Mr. Keltner contends the city of Phoenix is in violation of state statute and its own local ordinance regarding how sewer fees are assessed for out-of-municipality customers.

“This whole business of using water is contrary to the city’s own code,” he said. “They get you on the outset by charging by water usage, then you have to appeal to the city, but we would be happy by paying X-amount plus 50 percent as the city’s code stipulates.”

The petition that started it all about two years ago displayed by Paradise Valley resident Gary Edens who has spearheaded the local effort to corral sewer fee assessments by the city of Phoenix. (File photo)

Mr. Keltner provided the Independent with Phoenix sewer bills comparing month to month and year to year. Some show considerable swings in monthly charges — including a bill in June 2015 for sewer fees totaling $36.70, while his July 2015 bill showed a fee of $92.26.

In addition, Mr. Keltner says a year-to-year comparison of costs from 2014 to 2015 reveals charges of $25 to $164. Mr. Keltner, however, was able to negotiate with Phoenix through its appeal process. The monthly charge was eventually reduced to $24.01.

Gary Edens, who was the first to publicly speak out against the sewer fee practices, says Paradise Valley residents are being gouged.

“We in Paradise Valley are paying 500 percent more on average,” he said in a Nov. 28 phone interview. “People use the same amount of sewage if they live in an apartment in Phoenix or a 10-acre lot in Paradise Valley or any place else. Two people use the same amount regardless of where they live.”

Mr. Edens feels this is an illegal tax masquerading as a sewer-fee surcharge.

“The burden is on us to prove to them how much water we used,” he said. “At the end of the day, we object strenuously to estimating our sewer usage through our water usage because that just doesn’t compute.”

Mr. Edens says he and his fellow neighbors believe the law is on their side. He says the matter must come to a fair and equitable resolution.

“There is a groundswell of support on this,” he explained. “We are not going away. We are not satisfied. We will keep fighting this because it is patently unfair.”

The FairPhxSewerFees@gmail.com e-mail, subsequent Facebook Fanpage and website: fairphxsewerfees.org  has been set up for Paradise Valley residents to communicate on next steps to help find a solution to concerns around Phoenix sewer fees.

Rep. Maria Syms has requested a formal Attorney General investigation into how the city of Phoenix is assessing certain Paradise Valley sewer fees. (File photo)

Keeping it 500

Rep. Syms, a resident of the Town of Paradise Valley, contends residents, neighbors and former elected colleagues have been in contact with her about the issue.

“A significant number of Paradise Valley residents have been attempting to work on a resolution to this sewer fee issue for more than a year but have not been able to gain any traction with the city of Phoenix,” she said.

“I understand that Mayor (Michael) Collins and town staff have also reached out to the city but have not been able to reach a satisfactory resolution. The city is legally obligated to ensure that its sewer fees are just and reasonable, yet the charges to non-residents can be up to 500 times the going rate.”

Rep. Syms says from her perspective it seems the charges assessed by the city of Phoenix are unreasonable given the tenets of both state statute and Phoenix ordinance.

“That does not seem reasonable under any circumstance and to date, the city has not provided any legitimate or transparent explanation for such an exorbitant upcharge,” she pointed out. “Non-residents are left with little recourse given they do not vote for the Phoenix City Council.”

But Rep. Syms says Paradise Valley residents ought to expect to pay more for a core city service not provided by their home municipality, which is the Town of Paradise Valley.

“I think the non-resident customers recognize that some extra fee is necessary when the city is providing services to outside customers. Scottsdale, for example, has an intergovernmental agreement with Paradise Valley and there is a reasonable surcharge above the regular rate, but it is not 500 percent — not even close,” she said.

Prior to being elected to the Arizona Legislature, Rep. Syms served as the legal policy advisor to the Arizona Attorney General.

“I see this as a consumer protection issue and the Attorney General has been a leader in this area,” she pointed out.

But more than one solution is being pursued, Rep. Syms suggests.

“In addition to the Attorney General investigation, discussions with the city of Phoenix will continue and there is also the possibility of a legislative solution,” she said.

“I will always engage in discussions to find a mutually agreeable solution to this issue. I remain hopeful as the parties move forward in their discussions.”

Northeast Valley Managing Editor Terrance Thornton can be contacted at tthornton@newszap.com

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