Public Hearing on Water, Wastewater, and Sanitation Rates
and the Proposed City Consolidated Fee and Rate Schedule
Accounting Manager Morris recommended that Mayor and Council hold a public hearing on the proposed fee schedule to include additional public hearing on the proposed City water, wastewater, and sanitation rates.
Mrs. Morris reported that since FY2005 Council has adopted a Comprehensive Fee and Rate Schedule that incorporates all departments and government functions. The schedule is reviewed and generally adopted during the budget process. The fee and rate schedule functions outside the Casa Grande Municipal Code but is incorporated into it by reference. Prior to the hearing and subsequent consideration by Council, the fees were posted for more than 60 days on the City website. The Council also reviews the fees and rates as part of the budget process. Fees for water and wastewater are also adopted as part of the consolidated fee schedule after compliance with the public notice provisions of A.R.S. 9-511.01. Although no additional public hearing is required for adoption of the water and wastewater fees, the public is always permitted to comment on them as part of the hearing on the rate schedule. Additionally, although all statutory notice requirements were met with respect to the water and wastewater fees, because some of the outreach did not reach the customers as expected in their billings, staff intends to continue outreach to make sure our citizens know they have the opportunity to specifically comment on those rates as part of this hearing.
The intent for fee and rate changes is to more closely recover the cost of a service from the person or group that benefits from the service while matching each programs cost recovery philosophy. As a result, fee and rate recommendations are based on cost recovery targets, cost of providing the service and market comparisons. Some fees are set low to remove the barrier for compliance such as dog licenses and some fees attempt to recover 100% of the cost such as adult recreation. Most fee changes relate to Development Center fees - Planning, Engineering, Land Use and Zoning. The fees have been adjusted to cover the actual cost of providing that service. Several fees have actually been reduced to reflect current costs of service. In addition some of the fees have been increased to cover an expanded scope of service covered by the fee. Limited changes are included in our Community Services department and airport. Water, Wastewater and Sanitation Rates are also included as part of the consolidated fee schedule.
Although not specifically called out in our fee table it is the City’s intent to not include sales taxes and other government pass through fees as part of the adopted fee in most cases. Currently there is a mixture of rates which include tax and some that do not. Unless specifically called out in the attached schedule the adopted fees do not include taxes or other government fees.
The Fee schedule attached reflects the final proposed rate schedule by staff and all modifications to the schedule are highlighted throughout document. Wastewater and Sanitation increases have been adjusted down per the discussion at the council work sessions held on May 16 and the work session and public hearing held June 6, 2016. All other items remain unchanged from the original proposal which was posted to our website in accordance with state law.
The FY2017 budget has been prepared utilizing the fee amounts included in this consolidated rate table. Modifications to any specific fee or rate may have a direct impact on revenue collections and the provision of a particular service
Council may consider any combination of rate adjustments that are at or below the amount proposed in the attached fee schedule. Revenue requirements will not change and any change to the rates charged have a direct impact on the amount of funds available to perform each service.
Mayor Jackson called for public hearing to allow comments on this matter.
George W. Anderson, Jr of 1696 E. Elegante Drive, Casa Grande AZ 85122 provided the City Council information regarding his income, expenses and comparison of utility increases. Mr. Anderson expressed opposition to the City’s Sanitation proposed fee increase. Further, Mr. Anderson suggested for Staff to provide a hard copy of the slide presentation for review by citizens attending the public hearing.
Hank Treadwell, 34180 W. Macho Road, Stanfield AZ 85172 offered comments concerning the water (Copper Mountain Ranch) lead/contaminated problem at their subdivision.
Mayor Jackson requested for Public Works Director Louis and Deputy City Manager to follow up with Mr. Treadwell.
In response to Mayor Jackson, Director Louis conveyed that the Copper Mountain Ranch Public Water System is owned and operated by the City of Casa Grande. This system contains Nitrate levels in exceedance of the permitted levels for drinking water. This exceedance has resulted in the City entering into a Consent Order with the Arizona Department of Environmental Quality (ADEQ) regarding this issue. The agreement requires that a treatment system be installed to reduce the level of nitrates contained in the drinking water distributed in the system.
Further, Director Louis explained that nitrate in the water is very hard for the body to breakdown so they can build up in the body which typically impacts the infants and elderly more than anyone else. It is safe and not harmful with body contact, unless the water is consumed in a prolonged manner. This is when there are certain health issues. Notices were sent that identified and conveyed to the customers what they can and can’t do.
Additionally, Public Works Director Louis explained that upon conducting water samples at each residence a lead exceedance in several of the samples were identified. City Staff is currently following the entire increased testing requirements to go through the process of determining where and if we have any lead issues. Further, Director Louis confirmed that the City water source does not have lead exceedances. Staff believes it was a sampling error and it was not a lead pipe issue; however, Staff has to go through the entire process no matter what, due to initial exceedances which the process could take about 2 years.
Peter Redwine, 1940 N. Hubbard Lane, Casa Grande AZ 85122 asked about the Copper Mountain Ranch Water System and expressed his concern on the 10% increase on water rates.
In response to Mr. Redwine, Director Louis conveyed guessing that the lifespan of water treatment system would be from 10+ years if not more than that and it really depends on how the City maintains that system.
The Mayor and Council concurred with Mr. Redwine’s comment that City has considered several options such as co-operative or selling the Copper Mountain Ranch Water System.
Mr. Redwine offered some of the health side effect of high nitrate levels in the water such as increase in birth defects, miscarriages and babies that are six months old or less are likely to have blue baby syndrome due to lack of intestinal ph to compensate for higher nitrate levels.
Margarite Garvey of 1818 N. Richmond Place, Casa Grande AZ 85122 expressed her concern that she and her husband may not have enough money to pay the bills and is worried about the City’s proposed rate fee increases.
Council Member Powell conveyed that there is also a recommendation of 15% fee increase on Airport T-Hangars and announced that this is the appropriate time should anybody from audience wish to offer comments.
John McGuire of 941 E. Penny Lane, Casa Grande, AZ 85122 expressed appreciation to Mayor Jackson for conducting another public hearing tonight for citizens to offer comments on the City’s proposed rate increases. Mr. McGuire conveyed that he is very active in social media and heard lots of complaints about the proposed rate increases; however, there’s only three (3) people that came up to speak tonight to express their dissatisfaction. Further, Mr. McGuire added that he understands the complexity of the issue and hoped that Council will take time to offer explanation to the citizens why the fees have gone up as much as they have or as quickly as they have – nobody likes this, he surely does not like it, but expressed that he understands that Council has other obligations.
Additionally, Mr. McGuire conveyed making sure people understand that if the City has some better than anticipated growth, future increases may not be projected to be at this point. The important thing to remember is that City Council has to play it on both sides.
Council Member Kortsen suggested that Staff for the benefit of the citizens to provide hard copies of the information on numbers with regards to what it’s costing the City and how the City is going to pay it so that the citizens can better understand the proposed increases.
Donald Domeyer of 9792 Bradshaw Drive, Arizona City, AZ 85123 and a member of the City of Casa Grande Airport Advisory Board expressed his concern that the 15% rate increase for the Airport T-Hangars is too high and suggested considering a 5% increase instead. Mr. Domeyer also suggested for council to consider charging other users (private people who have hangars at the airport) 5% user fee.
In response to Mr. Domeyer, Mayor Jackson conveyed that most of the private people that have hangars at the airport pay a land lease on a monthly basis.
Mr. Domeyer also offered his concern on the maintenance of the hangars.
Autry Warren of 33841 W. Siesta, Stanfield AZ 85172 reported that no one has contacted her since the last meeting about her concerns on lead/contaminated problem in the water supply at her subdivision.
In response to Ms. Warren, Director Louis conveyed that Terrence McKeon, Deputy Public Works Director is most knowledgeable of the issue at the Copper Mountain Ranch water system and Mr. McKeon will be contacting her.
Nat Smith of 9th Olive Avenue, Casa Grande AZ 85122 offered comments regarding the Copper Mountain Ranch water system and suggested for the City to consult with Arizona Water Company to help resolve the nitrate issues.
There being no further comments, Mayor Jackson declared the public hearing closed.
Council Member Powell addressed the situation of Airport T-Hangars. The City owns and leases the T-Hangars and as a landlord it is the City’s responsibility to maintain the hangars in good working conditions which is not the case based on the comments of the tenants/users. Council Member Powell suggested that the City Council needs to concentrate on trying to get the T-Hangars back in shape.
Council Member Powell conveyed that the proposed 15% increase in fee for the hangars was approved and recommended by the Airport Advisory Board to the City Council without proper representation and input of the actual people renting the hangars.
In response to Council Member Powell, Director Louis explained that Staff conducted the analysis, presented the proposed 15% increase in fees for airport hangars and recommended for consideration to the Airport Advisory Board. The Board’s approval of was then utilized to support Staff’s changes in the Consolidated Fee Schedule.
In response to Council Member Powell, Deputy City Manager Rains conveyed that the number one revenue stream that the airport generates from is the sale of jet fuel with the T-Hangar rentals are likely the second contributor.
Council Member Powell suggested a 7% increase in fee of the Airport T-Hangar for FY2017 instead of 15% increase. The 7% would produce about $9,500 per year that will be earmarked solely for the repair and maintenance of the T-Hangars.
In response to Council Member Fitzgibbons, Director Louis conveyed that Staff generally knows the lists of things that need to be taken care of with regards to the T-Hangars; additionally, Staff is currently in the process of conducting a survey of each tenant to identify what their priority needs are, such as rating each item that needs to be addressed and thereby giving the tenants option to provide any other feedback they might have. The information will be utilized to help identify what are those priorities and how best to tackle them once the revenue stream is identified.
In response to Council Member Powell, Director Louis conveyed that the fee increase is meant to focus on maintenance of T-Hangars including the overhead cost for managing the operation.
Council Member Powell asked why the overhead cost for managing the operation will be assessed to the T-Hangar tenants. There should be a 5% fee across the airport where everybody pays. The T-Hangar tenants shouldn’t have to pay the price for bringing the hangars back into the type of repair that should have been kept up.
Council Member Fitzgibbons asked for clarification if the money will go toward the repairs of the hangars and what is the actual estimate to get those hangars up to the standard where it needs to be.
In response to Council Member Fitzgibbons, Director Louis conveyed that the repairs would cost far over $20,000 to start. The airport rates have not been increase in quite a while.
In response to Council Member Kortsen, Director Louis conveyed that some hangar users are in a long term lease agreement. According to the term of their land lease agreement their fee increases every five years.
Further, Director Louis stated that there is another driving force behind trying to keep our rates with in the market and that is the requirement of our grant requirement with the federal government. We have to make sure that our prices are fair market value – competing with other airports. We can’t underprice something because then we won’t be able to support the airport.
In response to Council Member Kortsen, Director Louis conveyed that Staff is trying to establish rates that are competitive in the marketplace and Staff believes even with the 15% increase we are still going to be very competitive in the hangar market place.
In response to Council Member Varela, Director Louis believes that the last airport fee increase was held in 2010 for the large hangars only and the 2007 increase was for the small hangars.
Director Louis apologized to Council Member Varela for not having the information regarding the percentage of hangar users that are from out of town.
Council Member Herman announced given the 15% increase in fee which is $400 per hangar to do repairs which is not a lot to work on each hangar. He liked that the funds will be dedicated solely to fix the hangars.
Council Member Herman suggested conducting council study session in the future to learn more about the condition and needed repairs of the hangars.
Mayor Jackson shared the concern he received that the $9,000 funding per year would not be enough to even fix two (2) hangars. Further, Mayor Jackson concurred with Council Member Powell’s concern that the City needs to maintain the hangars, but asked where the money is going to come from.
Mayor Jackson explained that at the end of the day, we try to move the airport to the same status the council did with the golf course; however, this will take a while. It is unfortunate that the City is in this situation where we have to make improvements but we don’t have the money to do it. The challenge would be if council doesn’t want to do this as part of the fee increase but committed to fixing the hangars, council will need to find some money in the general fund.
Deputy City Manager Rains announced that Council’s concerns are well taken and suggested conducting a study session at the next council meeting rather than looking at the fees or the maintenance component. Staff will provide the City Council financial overviews that will summarize what revenue stream there are in the airport and also review the expenses.
In response to Mayor Jackson, Deputy City Manager Rains conveyed that there is a 60-day notice requirement for any new fee that the City will impose; however, nothing will preclude the city council should they decide to either proceed with the 5% or 0% increase for the airport t-hangars.
Council Member Powell reiterated that he felt that council let the people down with regards to t-hangar users. $164,000 in revenue generated from 40 large t-hangar, 12 small t-hangars and 18 t-shade hangars that are not being increased; with this revenue we can’t find room to allocate maintenance for the hangars. Further, Council Member Powell stated that money was spent to improve the lounge area to look better which is the second major source of revenue; t-hangar tenants were let down by not conducting the repair and maintenance of their hangars.
Mayor Pro Tempore Montoya suggested having an equal type of user fee for everybody. Further, Mayor Pro Tempore Montoya conveyed that it is not fair comparing our airport to other municipal airports (Phoenix Deer Valley) that receives other sources of funds. The City of Casa Grande has not raised the fee in over 5 to10 years. He is also glad to know that Director Louis has a plan justifying should the fee go up there will be a plan for the money to be utilized for maintaining the hangars. It should be acknowledge that the City has done some repairs based on the available limited funds; it’s not fair to say that nothing was done.
Council Member Powell expressed that when the City Council is looking for money, we paid $8 Million to $9 Million in five years for the Francisco Grande Sports World; and now we are worried about where are we going to get $20,000 to $30,000 to help fix the airport t-hangars. Really, where is the council’s priority?
Mayor Jackson requested having the information on the magnitude of the repairs that need to be completed to better understand the problem.
Council Member Kortsen announced that this is the council’s opportunity to review the issues and start looking at the problem from different sides. It is crucial to know and obtain from each owner the list of repairs that needs to be done and place the cost for each item; that way council will be able to determine the percentage for the increase in fees.