The die has been cast by Tucson Water already agreeing to serve areas outside the city’s limits. It is now the case there are areas outside of Tucson’s city limits that are surrounded by Tucson Water service. It is not realistic to deny water service to such areas, since there is no other option.
Some of the areas where Tucson Water is now refusing service were included in Tucson’s designation by the Arizona Department of Water Resources for having an assured water supply. Some of these areas were also in areas claimed to be served by Tucson when it got its allocation of Colorado River water from the Central Arizona Project.
|
|
But none of this means city water customers ought to subsidize growth outside Tucson’s city limits.
The water connection fee outside Tucson’s city limits ought to be at least four times that for a connection inside the city limits.
Why?
• Every resident served by Tucson Water outside the city’s limits does not generate state revenue-share money to the city. That’s something like $200 per person per year. That lost revenue opportunity needs to be added onto water connection fees outside the city limits.
• Properties outside Tucson’s city limits do not generate any property tax revenue to Tucson, which also needs to be factored into connection fees in those areas.
• The market value of renewable water — as set in a precedent by Prescott Valley — is in the range of $24,000 per acre foot. An acre-foot of water can serve three new homes. Thus each new home takes $8,000 worth of water rights to be created. Tucson gets back the $8,000 worth of water rights from residents inside its city limits in state revenue share, property tax revenue, and sales tax revenue.
• The actual cost of the wells and pipes to serve a new home, which runs about $3,000 per home statewide, is probably more expensive going outside Tucson. Thus, an $11,000 per new home connection fee for new homes outside Tucson’s city limits can be justified, and defended.
Insofar as any new development is close to the existing Tucson city limits, one can bet that given the choice of an $11,000 per home connection fee outside the city limits, versus a $3,000 fee inside the city limits, developers would try real hard to be annexed into Tucson.
If they can’t be annexed for whatever reason, such as homeowners between their development and the city limits that refuse to be annexed, then so be it. Charge $11,000 for the new connection.
The higher connection fee for new water connections should be limited to areas that could realistically be annexed into Tucson. Those would include the foothills of the Tucson and Santa Catalina mountains, the far eastside and other areas not likely to be “annexable” by Marana or Oro Valley in a “sphere of influence” context.
The only limit in state law on a city charging higher rates outside its incorporated limits is a 25 percent cap on rates inside another city or town. Tucson Water could raise its rates an additional 25 percent for its water service in Marana and Oro Valley. But, as noted earlier, Tucson needs to get out of serving water in other towns because there is obviously no annexation potential for Tucson in those areas.
There is no such limit on higher water rates in the unincorporated areas.
Tucson could charge double the rates in those areas, and it should.
Of course residents in areas such as the Catalina Foothills would scream to high heaven if their water rates were twice what people inside the city limits pay.
So what? They don’t vote in Tucson elections. They could if they agreed to be annexed. And if they were annexed, they could then cut their water bills in half.
And that is exactly the point.
Contact Hugh Holub at HughHolub@msn.com. Holub, who has specialized in water issues, calls himself a semi-retired lawyer.
Comments