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City Council to discuss water rate increase

Citizen Staff Writer



The City Council is slated to hear presentations at its meeting Tuesday on the finances of city operations whose fees are supposed to cover their costs – water, environmental services and golf.

The three are considered “enterprise funds,” which means their finances should be separate from other city operations.

Several council members said they planned to ask questions Tuesday about how separate the funds are and the cumulative effect of rate and fee increases.

Tucson Water’s plan for next fiscal year assumes several rate and fee increases. It shows the utility paying about $4.2 million more to the city’s general fund than this year.

Tucson Water Director Jeff Biggs wrote in a memo to Deputy City Manager Mike Letcher on Thursday that even with about $9.5 million in savings, Tucson Water would need to raise rates 10 percent for the fiscal year that begins July 1.

It’s not yet clear how the fee increase would be structured, spokesman Mitch Basefsky said, but the rise would not be across the board.

“We definitely want to make sure that we’re not setting water rates to the balance the city’s budget,” Councilwoman Karin Uhlich said.

There are also concerns about raising several taxes and fees at once. “You can only put so much on people,” Councilwoman Nina Trasoff said.

Councilman Rodney Glassman said, “In our current economy, I would be very reticent about adding new fees or taxes . . .”

The proposed Tucson Water rate hike is in addition to recommended increases in two fees paid by new customers and a potential rise in the conservation program fee from 3 cents per 100 cubic feet of water to 4 cents.

The plan was approved by the Citizens’ Water Advisory Committee. It also includes a possible 2009 bond authorization, scaled back infrastructure construction and additional taxes proposed by city officials in a recently released “Revenue Enhancement Report.”

It takes into account a proposed increase in the utility tax from 2 percent to 3 percent and a proposed “in-lieu-of” tax that would function as a property tax for Tucson Water property and cost the department $1.6 million a year. Deputy City Manager Mike Letcher said the proposed taxes did not prompt the request for a rate increase.

Payments for both taxes would go to the city’s general operating fund, which covers services such as police, fire and parks and is an anticipated $30 million in the red. Another $9.9 million from the department’s operating fund would funnel into that fund to pay for the services other city departments provide to Tucson Water, such as information technology and legal services.

Environmental Services has also proposed raising rates. Recommended are increasing the residential trash fee 60 cents to $14.60 and commercial tipping fees as much as 5 percent. Neighborhood recycling centers would also be closed.

City Manager Mike Hein has recommended a slew of savings measures and ways to add to the city’s revenues, all of which are under consideration by the City Council, which has the final say.

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