Sun, Sep 07, 2008

East

Sahuarita Town Council boosts new-home sewer fee by 25.7%

By Tim Ellis
Arizona Daily Star
Tucson, Arizona | Published: 08.30.2007
Sahuarita's Town Council on Monday began what may be more than a decade of steadily increasing fees to pay for expansion of the town's sewer system.
The town's financial director also said he'll soon ask the council to consider increasing sewer- user fees for homes already hooked up to the system.
Council members voted unanimously Monday to boost the cost of connecting new homes to the town's sewer system by an average of 25.7 percent, to an average of $3,876 per home from $3,084 per home.
The connection-fee hike for new homes in Rancho Sahuarita and Rancho Resort will be effective Oct. 1, followed by an 8 percent hike on Jan. 1.
Sahuarita businessman Alex Jácome urged council members in a public hearing before the vote to consider phasing in the fee hikes over a long period of time.
"There's no disputing the fact that the sewer situation is in crisis," said Jácome, who's also a member of the town's Economic Development Commission.
But the council should gradually increase the fees to lessen their impact on the sluggish housing market, he said.
Vice Mayor Phil Conklin said he understands Jácome's point. "But," he added, "we have not been keeping up with raising these fees … and I think it's important that we get these on the books as soon as possible."
Town officials are scrambling to expand the town's wastewater-treatment plant to keep up with residential growth that has been booming in recent years. The plant is now at its 490,000-gallon-per-day capacity, requiring the town to transport sewage by truck to a county facility in Green Valley until an interim expansion to 690,000 gallons per day is completed in October.
A.C. Marriotti, the town's finance director, laid out the need for the fee hike — and several more that will be necessary between now and 2023, to keep up with costs — in an analysis outlining three options that he prepared for the council.
His analysis states that the town will need to invest some $53.5 million by 2023 to expand the system enough to handle anticipated growth in the area served by the system.
Town officials had intended for the utility to be self-sufficient when they created an enterprise fund for it after taking over its operation in fiscal year 2002-03.
One option shows no fee increase and would require subsidies to begin in fiscal 2010-11, when the town would have to pay $335,089 into the utility's capital-expansion fund. Under this scenario, the analysis projects the town would have to subsidize the fund by a total of $30.4 million by fiscal 2022-23.
Another scenario, which projects how much the town would need to break even to expand the system, suggests the connection fee will have to be increased by almost 89 percent from the current fee, to an average of $5,820 per new home.
But the town cannot raise connection fees higher than those charged by the county, because of an agreement with Bob Sharpe, the developer of Rancho Sahuarita and Rancho Resort.
The third scenario, based on the town's raising connection fees to keep current with the county's anticipated fee hikes, estimates the town will need to begin subsidizing the utility's capital-expansion fund in fiscal 2011-12 by $720,281. Keeping the fee at the county level would require a total subsidy of some $19.5 million by fiscal 2022-23, according to the analysis.
Marriotti said he's also working on a proposal for "fairly substantial" increases in sewer- user fees. User fees are charged to all existing homes and are used to pay for operation and maintenance, not expansion, of the system.
Those user-fee increases probably will come before the council in October, he said.
● Contact reporter Tim Ellis at 807-8414 or at tellis@azstarnet.com.