The Payson Town Council indicated its support for a notice of intention to enact a $5 across-the-board increase in water rates and suggested additional increases will probably be necessary in the near future at a special meeting Tuesday.
The increase in the basic monthly service charge from $13.65 to $18.65 was essentially the same request presented to the council by Public Works Director Buzz Walker at its Aug. 10 meeting when he was told to prepare additional options. The council selected the option from seven presented by Walker, several of which would have imposed a larger portion of the increase on high-use customers.
The motion passed by a 6-1 margin, with Councilmember Hoby Herron casting the dissenting vote.
According to Walker, the additional revenues are needed to offset a five-year decrease in the water department's spending reserves. "We have to maintain a complex and growing water system that includes 20 to 30 miles of aging water mains," Walker told the council. "Some of the water lines are almost 50 years old and are 2-inch lines that will need to be upsized when they are replaced."
Walker said additional revenues are also needed to pay for several unfunded federal mandates, including radon testing, which are expected to be required in the next two years.
Mayor Ray Schum and Councilmember Jim Spencer both said that even with the increase, Payson water rates will remain the lowest in northern Arizona. Schum backed this contention with a chart comparing Payson's base rate with those of Pine/Strawberry, Star Valley, Gisela, Tonto Basin, Flagstaff and Buckeye. The average base rate in those communities is $20.03.
Councilmember Dick Wolfe noted that the increase will not be enough to cover projected deficits and asked Walker why he wasn't requesting an even larger increase. "I didn't ask for an $8 increase because rate hikes have been difficult in the past," Walker said. "But we'll take $8 if you want to give it to us," he said.
In choosing the $5 across-the-board option, several councilmembers expressed the opinion that all water customers need to share the cost of maintaining the system. Reflecting a viewpoint expressed by Councilmember Ken Murphy, Spencer asked Walker to also initiate a study of possible conservation-related increases and report back to the council at a later date.
While public comment was not allowed at the special meeting, Town Manager Rich Underkofler said the public will have plenty of opportunities for input before the increase actually takes effect. "The resolution of intent will be presented for council's consideration at the next regular meeting on Aug. 14," Underkofler said. "Then we have to sit on it for 30 days before a resolution can be passed."
Schum said he made the decision not to allow public comment. "It doesn't apply to every special meeting," he said.
"Anybody can change their mind before the next meeting," he added. "Each councilmember represents a constituency, and I encourage citizens with input to talk to their representative between now and then. This was just a work session for us to express our ideas."
According to Jeffrey Blilie, deputy town attorney, the vote taken at the special meeting only "provides direction for the notice of intention" to be presented at the regular meeting.
Following the vote on the rate increase, Herron presented statistics indicating the last 30 years were the wettest of the previous century in the Rim country. Assuming that future rainfall totals will be lower, and considering growth projections for the town, he suggested that Payson should not promise water it doesn't have. "We're spending water before we have it," he said, "and I just want to point that out."
After the meeting, Schum said that Herron might have been premature in his assessment of the town's future water supply.
"Buzz Walker has been charged with finding new water sources," Schum said, "and I think he will continue to find them."
Turning to the subject of affordable housing, the council passed motions accepting the definition of affordable housing and minimum incentive criteria for affordable housing projects recommended by the Housing Advisory Committee. In that definition, an "affordable housing unit" is defined in part as a "unit for which no more than 30 percent of gross monthly income is needed for housing payments."
The minimum criteria, which apply only to the Green Valley Redevelopment Area, include giving preference to multi-family rentals and relaxing peak water demand limits to enable a minimum of 60 and a maximum of 100 multi-family units per project if the developer/owner agrees to limit occupancy to people whose income does not exceed the Gila County median income, and to charge rents not to exceed 120 percent of the fair market rent in Gila County.
Finally, the council narrowly passed a motion directing the town's legal staff to develop and draft a resolution incorporating a range of potential incentive options for underwriting development impact fees in the Green Valley Redevelopment Area. Concern was expressed by several councilmembers that some businesses already located in Payson might move into the redevelopment area to take advantage of the incentives without bringing "added value" in the form of additional "good" jobs to the town.
Those opposed to the motion were led by Murphy who expressed the opinion that the business community and the chamber of commerce need to be consulted before proceeding.