The Tucson City Council will vote on a proposal on 4/6/2021 on whether to raise water rates for customers who live outside the city limits in unincorporated Pima County.
The increase, if approved, would raise the rates for customers in the unincorporated areas who use Tucson water from 10% to 30%.
The rates for city users would not increase.
Other communities which use Tucson water, like Oro Valley or Marana, would not see an increase in their rates.
A rate differential is not uncommon in Arizona and it is perfectly legal.
“Tucson is unique that it has not charged a differential rate,” said Timothy Thomure, the Director of Tucson Water. “Scottsdale, Phoenix, Flagstaff, Yuma and others and that differential rate can be as much as 50%.”
The city will vote on a “notice of intent” to move forward with the potential rate hike.
It’s the first step in the process which can take months and must go through a public hearing.
The city says it’s about fairness.
“It’s just a matter of whether or not it’s fair for city customers to bear the risk of the water utility as opposed to all customers contributing towards that risk,” Thomure said.
Thomure says the Tucson general fund is the financial backing for the water utility which city residents pay into but county residents do not except on the rare occasion they use city stores or restaurants.
While Tucson city leaders are pondering whether to go forward with it, Pima County leaders will be voting on what they can do to stop it.
It will remind the city of a 1979 agreement where the city was designated the regional water utility and the county was designated the regional wastewater utility.
“So now, 40 year after the fact, not because of any additional costs that they bear to get water to people in unincorporated areas but to generate excess revenue, they’re talking about differential water rates,” said Rex Scott, Pima County Supervisor from District 1. “All this is going to do is generate excess revenue beyond the cost of providing water to Tucson water customers on the backs of one group of rate payers.”
That revenue, by city estimates, would range from $5 million to $15 million annually.
“To me, that’s another reason why this is a very inequitable and punitive proposal to generate additional revenue to the utility,” Scott said.
There’s also the issue of state-shared revenue. Pima County and Tucson get penalized every year because revenues are doled out by the state based on incorporation. The Tucson area loses up to $40 million annually because 40% of its population lives in unincorporated areas.