Water Bill Blunder

Financing bill barely saved

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The near-death of a state bill to make it easier to finance local water projects last week briefly threw Payson into a panic about financing for the final $30 million needed to build the Blue Ridge pipeline.

However, a quick legislative shuffle to save Rep. Brenda Barton’s (R-Payson) HB 2523 had reassured Payson by the end of the week.

Barton said that she scrambled to save the bill, which passed the House Tuesday on a bipartisan 54-7 vote. The bill must now make its way through the Senate. The bill had only $1 million in funding, but still included a crucial provision to allow cities to borrow money for projects with a 50-year repayment schedule.

“I did a whole lot of scrambling last week,” said Barton in an email.

The crisis came when House Appropriations Chair John Kav­anaugh (R-Fountain Hills) strip­ped the $30 million in funding and vowed to kill the bill, partly because Rep. Barton and House Speaker Andy Tobin hadn’t initially introduced the bill in his budget committee first.

The speaker has enormous power when it comes to assigning bills to committee. That decision alone can doom a bill or grease the skids. By the same token, committee chairmen have the power to simply kill a bill, without even a hearing. For the past few years, Republican committee chairs have routinely killed almost any bill introduced by a Democrat.

But this time the untrammeled power of committee chairs nearly doomed HB 2523. Kavanaugh insisted that all bills that involve spending money must start in his committee before any other committees discuss them.

The bill would have set aside $30 million to help towns and cities obtain federal funding to build water infrastructure projects. More importantly, the bill would have changed state law to allow cities to pay back borrowed federal money over the course of 50 years.

Without the change in state law, federal water programs operating in Arizona like the Water Infrastructure Finance Authority (WIFA) could have only made loans on much shorter terms — as short as a decade in most cases.

The initial scuttling of the bill so alarmed Payson Town Mana­ger Debra Galbraith that at a budget study session on the town’s capital spending plans she suggested halting work on the Blue Ridge pipeline until Payson could be sure it could get federal financing at long-term rates.

However, Payson Mayor Kenny Evans said that even as a worst-case scenario, the town could get conventional, short-term WIFA financing to pay for the roughly $28 million worth of work the town must still complete.

The town has already spent more than $10 million on the pipeline, including all the environmental studies, engineering and installation of the pipes necessary to eventually connect the pipeline to the town’s existing well-based water system.

The town had originally hoped to cover the bulk of the pipeline costs with a $7,500-per-house impact fee on new construction. But the recession killed off the housing market locally and the town had to raise water rates, in part to guarantee a revenue stream so it could borrow WIFA money to build the pipeline.

The town hopes to qualify for a new, low-interest, long-term federal program to finance the balance of the pipeline costs. It may also partner with the Tonto Apache Tribe which has entitlements to Colorado River water it hopes to swap with the federal government for Blue Ridge water. If those arrangements come to fruition, the town can get long-term financing at a low enough cost that it may not have to raise water rates again.

HB 2523 would provide other options, which would make it possible for the town to get a 50-year loan from conventional WIFA sources.

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