Global Water president of regulated utilities, Ron Fleming, met with the Global Water rate increase task force Thursday and Maricopa residents regarding his utility’s rate increase application.
In his presentation, Fleming talked about Global Water’s history, partnership with the city and why another rate-increase is proposed.
“We get a determined rate of return by the Arizona Corporation Commission based on rates and the reason we’re filing for a rate increase, and the reason we filed the last one, is their rate of return has been zero in this utility,” Fleming said.
Fleming said half of Global Water’s revenue should come from base rates.
“There’s a certain amount of revenue you have to get back,” he said. “The price of water and rates going up across the country due to people having to deal with water scarcity and aging infrastructure, the new rate structure has come into play.”
Fleming said the rates will be phased in over several years and will be capped at about 5 percent annual increase for the average customer, which he said is less than $5 per month.
The meeting drew about 50 Maricopa residents, Home Owner Association board members, and councilmembers. Also in attendance were task force members Councilmen Bridger Kimball and Marvin Brown and Mayor Christian Price.
Fleming’s presentation lasted about 90 minutes, leaving 15 minutes for questions from residents. He said he is willing to come to the next task force meeting to explain in more detail how rates are set.
“If you don’t use any water; you just have it hooked up to your house, you’re paying almost $94 a month and that’s going to go up to $117, roughly,” Maricopa Meadows HOA President Eric Schmidt said to Fleming. “That’s a crazy amount.”
Fleming said Global Water has a rebate threshold to encourage water conservation.
“If you use less than community average, you get a rebate on your consumption,” he said. “We’ve rebated, as a company, more than $2 million to customers who fell below the threshold.”
However, Schmidt said the average customer uses 7,000 gallons per month, but Global is dropping the threshold to 6,053 gallons, which results in an additional $15 per month.
“You’re exactly right,” Fleming said. “In this new application, the rebate threshold has dropped. We left the same equation in place, but the numbers have changed.”
Villages’ resident Chad Ruffin asked Price why the city isn’t running the water.
“It’s a matter of operational timing,” Price said. “At this time you have to look at the cost of Global Water and the full cost of their infrastructure, but it is something that can always be explored in the future.”
Fleming said it is unfair to compare Maricopa to other cities, such as Casa Grande, in terms of water utilities because there are so many variables affecting rates.
“Half the city has existed for more than 50 years, the infrastructure is paid for, it’s got a different water source, it’s got different water quality,” Fleming said about Casa Grande.
Although he said comparing utilities is never a good idea, residents should look at cities like Anthem that experienced rapid growth and had to find water resources as Maricopa did.
“You’re going to find rates that are the same or higher,” he said. “The fact that we did build a city over a decade and it has new infrastructure, and we built it right this way, has resulted in pushing rates up.”
Price said the meeting was effective and he was happy with the attendance.
“This meeting was about listening to both sides of the story,” Price said. “It helps people make informed decisions.”
He said the council has invited the ACC to come to Maricopa and hear what residents have to say.
“I hope we have 5,000 people show up to that meeting and register their complaints,” he said.No date has been set for the next task force meeting, but HOAs and residents will be notified by email and will be asked to RSVP.
“This is a council task force trying to make sure that we are correctly informed on all sides so we can instruct our attorney on behalf of the citizens of every person in this town,” Price said.
Global Water is requesting an increase that translates into a monthly rate increase of $16.84, from $33.16 to $50, for a residential customer served by a 5/8-inch and 3/4-inch meter that uses 7,000 gallons per month for its Santa Cruz water system.
The rate hike would fund a 27.8 percent increase, about an additional $2.7 million.
For its Palo Verde sewage company, residential customers served by 5/8-inch or 3/4-inch water meters would see an increase from $62.91 to $78.63, or 25 percent.
That increase would fund a 28.9 percent increase of its current gross annual revenues, approximately $3.6 million.