Payson water rates slated to climb once again

By Matt Brabb
Mogollon Connection Editor

Just two months after voting to hike water rates in Payson, the town council is again moving forward on increases slated to begin in October 2011. Increases in October 2012, and 2013 are also being proposed, but may not be necessary.

An average rate payer using roughly 5,000 gallons per month would see an increase of $2.90 a month in 2011, $2.67 in 2012, and $1.80 in 2013. It amounts to a 24 percent increase in total, upping the average bill in 2010 of $30.50 to $37.87 in 2013.

Mayor Kenny Evans explained that the almost complete lack of new construction in the town has resulted in the need for the rate increase. He said that far fewer fees related to new construction had been collected by the town than was forecast.

He noted that before the recession, the town had seen an average of 250 new home permits per year. For each new home, the town collects $7,500 in water impact fees. This year, the town expects to approve only about 30 permits.

“We make projections in terms of capital improvements on these figures,” he said. “We could have dealt with a 50 percent drop, and that is huge, but we can’t deal with zero growth.”

“We are not changing the rules, the rules changed on us. No one could have foreseen the depth and the breadth of the downturn we have seen,” he added.

Evans noted that fees related to the construction of a new college campus that he is hoping to lure to Payson could make some of the planned increases unnecessary.

He asked Town Attorney Tim Wright if it would be difficult to defer the hikes if they were deemed unneeded at a later time.

“The council would have to follow town procedures, a resolution and a public hearing,” Wright said, but added that a study would not be needed, which would save the town time and money.

Payson Water Department Chairman Buzz Walker made a presentation to the council that was very similar to the one he made in May in support of rate increases. He maintained that the town would need to replace and update an aging water system.

He said that several locations around town were being served by water mains built in the 1950’s, systems that were built before the town could ever have anticipated the arrival of water from the C.C. Cragin Pipeline, and for which they are not built to handle.

He added that some of the fire hydrants in older areas of town did not have a gallons-per-minute flow that the department would ideally like to see.

In all, Walker said that some 45 miles of pipe will need to be replaced, at an estimated cost of $10 million.

Dan Jackson, CEO of Economist.com, also made a presentation similar to the one he made to the council in May.

He pointed out that until the increase the council passed earlier this year, the town had not raised its rates since 2003. According to Jackson, the average increase in that time in the rest of the country has been 35-40 percent. He said that rate adjustments are primarily due to reasons beyond a utility’s control: inflation, system replacement, etc.

“Water systems get old, lines have to be replaced. It’s a simple fact of life,” he said.

“The Payson area is very water challenged,” he added. “It has some of the highest water costs in the state.

“As a general rule, a utility can have low rates or high quality service, but not both.”

Jackson said the incremental yearly increases would minimize the pain to rate-payers.

(Support truthful journalism by picking up your copy of the Connection each week.  The truth is free and so is the Connection.)