A 10 percent increase in water rate revenue was assumed in the Tucson Water financial plan the City Council approved Tuesday.
No new rate schedule has been set, and there will not be a 10 percent increase of all rates, department spokesman Mitch Basefsky said.
Embedded in the plan is an alternative property tax the city may levy on Tucson Water properties and a potential boost in the utility tax.
The financial plan shows the utility paying about $4.2 million more to the city’s general fund next fiscal year than this year.
If approved, the property tax alone would provide $1.6 million to the general fund, which pays for police, fire, parks and many other city services.
That $1.6 million could be part of the $5 million in “revenue enhancements” city officials have counted on in draft budget documents to help close a projected deficit in the general fund that in the fall appeared as large as $80 million.
Current estimates put the figure at $1.6 million if the potential new taxes are included.
On Tuesday, the council also approved two fee increases that will be levied on new water customers.
The increases were part of a regular rate review and not a reaction to budget shortfalls linked to the economy, Basefsky said.
However, new customers are now increasing at about half of 1 percent a year, down from about 3 percent two years ago, Interim Deputy Director Chris Avery said.
The annexation of Raytheon Missile Systems, estimated to bring in about $1 million in sales tax to the city, was unopposed at the public hearing Tuesday.
The council also passed an ordinance requiring grocery stores to recycle plastic bags.