PRESCOTT - With the estimated cost of the Big Chino Water Ranch pipeline inching ever upward, questions arose this week about whether the city can afford the long-planned project.
In fact, two of the seven members of the Prescott City Council voiced doubts about continuing with the plans to build a pipeline from the Paulden-area water ranch to the tri-city area because of money concerns.
Councilman Bob Bell broached the issue after hearing a report from Big Chino Project Manager Jim Holt that the expected cost of the 30-mile pipeline now tops $174 million - up about $5 million since the mid-2006 estimate of $169 million.
Referring to the council's October rejection of the annexation of 1,142 acres of ranchland northeast of Prescott, Bell questioned whether the city would experience the growth in coming years to generate the revenue necessary for the pipeline project.
He stressed that while a majority of the council had voted for the recent Fann annexation, a minority was able to veto the action because of a stipulation of 2005's Reasonable Growth initiative that large-scale annexations must receive support from three-fourths of the council.
Because the city had planned to shift much of the financial responsibility for the pipeline to new homebuilders through impact fees, Bell said a lack of growth would make the pipeline project too expensive for current residents.
Therefore, Bell suggested that the city look into a number of actions: abandoning the pipeline; putting the Big Chino Ranch up for sale; dismantling the city's agreement with the Town of Prescott Valley; and reducing the water rates for current residents.
"I'm concerned too," Councilman Bob Roecker said after hearing Bell's comments. "We cannot afford to have the pipeline and the water ranch if we cannot annex property."
Roecker maintained that the city must take a definitive stand on any future annexations to avoid a situation similar to the recent failure.
"We cannot dilly-dally around the way we did on the Fann annexation," Roecker said, referring to the former Granite Dells/Point of Rock ranchland that local businessman Mike Fann owns. "We cannot burden existing citizens with the entire cost of this pipeline. It's too expensive."
Other council members disputed Bell and Roecker's reasoning, however.
Council members Robert Luzius and Mary Ann Suttles voted against the annexation because of concerns about the terms of the development agreement that went along with it.
This week, Suttles questioned the melding of the pipeline issue with annexation.
"What does annexation have to do with the Big Chino pipeline?" she asked.
"It's the way we pay for it," Roecker responded.
But Councilman Jim Lamerson maintained that one failed annexation does not necessarily doom future ones.
"Nobody's saying we shouldn't pursue other annexations that might be good deals," Lamerson said.
After the meeting, Budget and Finance Director Mark Woodfill acknowledged that the current city water-rate structure placed the bulk of the burden for the purchase of the Big Chino Water Ranch on new homebuilders through impact fees - at about an 80/20-percent split.
Even though water rates for residents recently increased - in part to help pay for the water ranch - Woodfill said impact fees on new homes were taking on a greater share of the cost.
A consulting firm currently is working on an updated water-rate plan, Woodfill said, which will take into account the greater costs of the pipeline, as well as the city's change in plans for arsenic treatment.
"The new rate study will look at the 80/20 split, which we have now, to some extent," Woodfill said.
In addition, he said, the study likely would include an option for shifting 100 percent burden for the pipeline to the city's current water customers - an option that Woodfill predicted would involve "significant" rate increases.
Recommendations on the new rate study should go to the City Council by about January or February, Woodfill said.
Noting that many residents expressed surprise at the recent water-rate increases, Woodfill added, "I'm hopeful that more people will participate in the public
meetings when we have the rate study this time."
Reader Comments
Posted: Friday, November 16, 2007
Article comment by:
J
Mr. Woodfill suggests more participants in the public meeting would be helpful. My suggestion is to have the meetings at a time when most community members are not at work, for example, have a meeting at 5 pm any night of the week or weekends versus 10 am on a Tuesday morning, and more advertising may help.
Posted: Friday, November 16, 2007
Article comment by:
Patrick
It seems to me that we are backing ourselves into the proverbial corner. We start this project (and I agree with Mr. Luzius, by the time it is done it will be in the $250M range). We must now have significant growth to be able to pay for it. The local Developers, whom are very smart folks, start to demand all sorts of concessions, be it cash (the $5M for the Resort), expanded City financial liabilities, zoning relief, or whatever) for any new project and even when the City Council agrees it is a "bad DA" like the Fann example, they also feel they have no choice but to vote yes. My thought is that anything that "forces" to vote yes on what you admit is a bad agreement is a problem.
Posted: Friday, November 16, 2007
Article comment by:
Nancy Shelton
Prescott Leadership has "officially known" they were out of Safe-Yield since 1998, and were warned for years prior that they were mining groundwater. They have led us to believe, through their "feel-good" message, that development will pay for itself. In the past ten years, development has continued, sales tax and building permit income obtained, and yet not enough saved, nor enough impact fees charged to developers, to pay for this pipeline. And now they're telling us we will have to have still more growth or the taxpayers will have pay for the pipeline?
Posted: Friday, November 16, 2007
Article comment by:
Tom Steele
With major costs to repair water and sewer lines comming to the residents of Prescott,it seems only fair for 100% of any new water for growth be in development fees for new construction. When construction revenue exceeds costs for the pipeline, vote again. Note that PV passes all costs for water and sewers to new development and would probably be pleased with the current housing market to put the Big Chino Pipeline on hold.
