Water rates and property taxes will rise in Pine and Strawberry, but just how much is anyone’s guess.
The Pine-Strawberry Water Improvement District faces a $680,000 deficit for 2013-14, the board learned this week from consultant John Nelson, a retired Gila County administrator.
The board will have to cover that deficit with rate increases and property tax increases, he said.
Nelson warned board members that the loans the district has used in the past have been exhausted. Now, water rates and tax revenues must cover necessary capital projects.
Nelson provided several budget scenarios to cover the shortfall, all of which included water rate changes.
Scenario No. 2, which the board focused on, features a 20 percent increase in water rates, but eliminates the so-called 3,000-gallon minimum charge adopted several years ago when Bill Haney chaired the board.
The 3,000-gallon minimum has provoked complaints from part-time and weekend residents who often don’t use any water at all in a given month, yet must pay the minimum charge.
Board members also discussed a property tax levy to raise $500,000. In that case, the tax rate would increase by 67 percent — or about $1.01 per $1,000 of property valuation.
The board considered borrowing more money to make up for a budget shortfall, but Nelson said the district probably should not seek another loan until the board approves a long-term infrastructure master plan.
“A good master plan is needed to provide a good plan on what is needed and when,” Nelson told the Roundup.
Eventually, board co-chairman Gary Lovetro made a motion to adopt a tentative budget cap of $2.9 million, including several of Nelson’s revenue-raising “alternatives.”
In the ensuing discussion, board member Richard Dickerson proposed limiting the increase in the property tax to $125,000 instead of $500,000. That would seem to imply a property tax rate increase of more like 10 to 20 percent, at least initially.
On the roll call vote that followed, six board members supported the change, while board member Sam Schwalm voted “nay.”
Later, he said, “I think with the huge increases in property taxes and rates that PSWID is asking for, the board owes it to the public to have a clear purpose for each of those dollars. The so-called special property tax levy of $125,000 has no clear and necessary purpose identified for it.”
The board this week did set a cap on spending, but hasn’t yet made a firm decision on either the rates or the property tax rate.
After the meeting, Water for Pine Strawberry — a watchdog consumer group — sent out an e-mail asking water users to show up at 10 a.m. May 18 for a PSWID board rate and budget hearing to protest the water and tax increases.
“The PSWID budget consequences to the local residents are overwhelming. Water rates will increase about 30 percent and property taxes will more than double,” the e-mail read.
Actually, the board in its discussions this week focused on a much lower increase in water rates and property tax rates. However, the board won’t make a final decision on rates until after the May 18 public meeting in the Pine Cultural Hall.