County approves water utility merger for November ballot

The Pinal County Board of Supervisors approved a request July 12 to call an election for a proposed merger of two local water utilities.

The Maricopa Domestic Water Improvement District filed the request seeking to absorb New Saddleback Vista Domestic Water Improvement District to help control rising rates for both companies.

Maricopa Domestic Manager Sara Sheehan said, despite having a separate board, New Saddleback has been outsourcing management and operations to Maricopa Domestic since 2012. Maricopa Domestic was formed in 1986 and serves the Heritage District.

This year Maricopa Domestic requested an increase in fees for its service, which sent New Saddleback on a search for a way to control costs.

“One of the things they proposed was to look into consolidation of the two districts,” Sheehan said. “Since Maricopa already manages them, New Saddleback would take on the lower water rates of Maricopa Domestic and also the lower property tax rate for property owners.”

New Saddleback currently charges a base rate of $65 per meter (for the first 10,000 gallons), and a property tax rate of 7.68 percent. Maricopa Domestic charges a base rate of $25 and a property tax of 3.36 percent.

If approved, Sheehan said, the merger will reduce rates significantly for New Saddleback customers by bringing their fee structure in line with Maricopa Domestic’s. This move will also help keep Maricopa Domestic’s rates low by bringing more customers into the fold. This doesn’t, however, mean much of an increase in revenue.

“It’s kind of a wash,” Sheehan said. “Because the bills will be lower for Maricopa Domestic, we’re also bringing in less money.”

It’s akin to broadening the base and lowering the rate, she said.

With more customers and only one company to manage, Sheehan said, there is also less overhead, which helps control cost. Insurance costs are a prime example of that, she said.

“If New Saddleback where to become part of Maricopa Domestic, Maricopa Domestic already pays for liability coverage of their board,” Sheehan said. “So, there’s a savings right off the bat of about $750 just to bring all of the equipment under one policy.”

There were two options for approval of the merger, Sheehan said. One option was a petition with a simple majority of residents approving the measure. The other option is to put it on a ballot.

Maricopa Domestic’s board, she said, chose the latter to give more time for voters to educate themselves on the merger.

If the merger passes, Maricopa Domestic’s three-member board will also add two seats to continue to provide representation for New Saddleback customers.