Chino Valley council to look at water, sewer rates
The Chino Valley Town Council will get a formal look at the town's year-old water and sewer rate study at an October council meeting.
Tuesday, Town Engineer Ron Grittman told the council members at a special study session that the town's current water and sewer rates provide only for the daily operation and management costs with no money for capital improvement projects.
He reminded the council that without sewer and water availability potential commercial and industrial firms will continue not to locate in Chino Valley.
"Wal-Mart decided not to locate here because of what it would have cost to bring sewer to its site," he said.
The town in the summer of 2008 hired Dan Jackson, managing director of economists.com, to look at the town's water and sewer rates and come up with some recommendations.
This study, which is now a year old, recommends an immediate rate increase and an annual rate increase of 5 percent or 6 percent each year.
If the council had adopted the study this past fall, the monthly water rate would have increased from $3.94 to $4.06 for the first 8,000 gallons, and gone from $4.93 to $5.08 for use of 8,001 to 20,000 gallons.
The study called for residential wastewater rates to increase from $45.20 to $48.40 initially and then increase annually.
Jackson stressed in his study that the rates "are highly preliminary." They could change significantly if projections don't meet forecasts. Grittman said the number of new accounts annually is way off, so the town must calculate in any projected new rates.
Also, if capital construction costs are greater than expected, Jackson says the rates must change to reflect that.
Grittman said these costs may indeed be considerably greater if the three sewer improvement districts proceed. These districts will create a need either to increase the town's present sewer treatment plant from 500,000 gallons per day to 1 million gallons per day or to build a new 1 million-gallon-a-day sewer treatment plant north of town.
He said it's possible the town could buy Fann Construction's interest in the wastewater treatment plant. If that happens, the town will have to include those costs and the costs for the town to operate the plant.
This is another decision the council must make before too long because it takes three years to get permits and get a new plant built.
The town also will need to incorporate the projected costs of acquiring the other water companies in Chino Valley.
Jackson recommends that once the council adopts a new rate that it review and adjust the water and sewer rates annually.
Grittman said he expects the council to direct him to update the study, and let him know what the individual members thinking is on what approach the town should take on how it plans to treat the town's wastewater.