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Friday, April 30, 2010

Walker ties big rate hike to CC Cragin water




By Matt Brabb
Connection Editor

Town of Payson water guru Buzz Walker took on the unenviable task of explaining the necessity of a 20 percent hike in water rates for Payson residents at last week's Citizens Awareness Committee (CAC) meeting.

“This has been a long term plan since 2006,” he explained to CAC members. “We have tarried for four years.”

Walker was asked why the town needs the additional revenue when it has some $7.5 million in the bank today.

He explained that with the eventual arrival of water from the CC Cragin pipeline, massive improvements would be necessary to infrastructure to move the additional supply. Water from the Cragin reservoir will effectively double the amount of water the town now has access to when it arrives in 2015.

“We need to correct the deficiencies of everything built before 1980,” he said.

He noted that there are water mains in the town that are as many as 60 years old, and that much of the infrastructure in Payson was built out of material that had a life-expectancy that has passed, or is very near to passing.

Walker noted that up to $1 million a year from the water fund is supposed to be spent on maintenance, but work force furloughs and restrictions on capital expenditures made necessary by a faltering economy have resulted in a curtailment of those efforts.

“We only did one major job last year.”

He noted that pipeline material has gone up drastically of late because there is a market for it now.

Putting his argument in a nutshell Walker said, “We need to continue to collect money to correct older infrastructure and get ready for Cragin water.”

Asked if the town was basing its rate structure with any consideration to the rates of other towns comparable to Payson, he answered emphatically in the negative.

“I want to make it clear that we don’t set rates based on what others charge. That would be crazy.”

He said that the 2006 water study that suggests the rate hike also requested the town get information on other communities rates so that they would be able to answer how Payson’s rates compared in the event the question were ever asked. But the information was never an integral part of the 2006 study according to Walker.

Several questions were asked that implied that the rate hike was tied to the construction of the Cragin pipeline. In the past it was assumed that 214 new building permits a year would provide enough money via impact fees to provide the budgeted funding for pipeline maintenance. However, in recent years, the town has seen nowhere near 214 new building permits per year.

“Life is full of risks,” said Walker, “It’s not a perfect world, and we’re not guaranteeing one.”

He stressed that the $10.5 million grant/loan the town received from the federal government to help build the Cragin pipeline could not be used for any other water project in Payson.

Walker said that he hopes the water treatment plant needed for Cragin water will be placed adjacent to Mesa del Caballo, a community just off of Houston Mesa Road that has seen its share of water woes in the recent past.

When questioned why the water department would need to raise rates when it had the resources to loan the town’s general fund $1 million, like it did earlier this year, Walker said that this year was a special case because of the dramatic drop in revenues the town was dealing with.

Payson Town Councilor Su Connell, who attended the meeting, further stressed the point that the option of borrowing from the water fund would never become commonplace for the town council.

“It was a very hard decision to make,” she said. “There are very rigid rules in place that we must pay it back in three or five years, and we’re hoping to pay it back even sooner.”

When asked again whether he thought a delay on the rate hike was possible, Walker answered, “I wouldn’t recommend it, but I don’t have a vote.”

“It all depends on how fast we want to benefit from Cragin water.”

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