Rising costs raise water rate hike discussion
by Brian DiTullio

CAREFREE – Rising costs could mean another water rate hike for Carefree Water Company customers.

Manager Stan Francom outlined the cost of doing business to the board of directors at their July 10 meeting. During the discussion, Francom said a review of the water rates would be on the agenda for the next meeting and that he would be proposing a rate hike that could be “substantial.”

Board member Glenn Miller asked Francom to define “substantial,” but Francom said he wasn’t finished preparing his numbers and couldn’t be more specific right now.

Board Chair Wayne Fulcher then asked this discussion be held off until the next meeting when all the facts would be available.

“We want to make sure there is adequate opportunity for the public to understand (why the rate hike is being proposed),” Fulcher said.

The last rate hike was enacted in July 2005. The current rates are a monthly $28 service charge for meters up to and including one inch for residential service. The rate then is $2.47 for each 1,000 gallons up to 7,000 gallons. The next tier is $3.12 per 1,000 gallons up to 15,000 gallons and the third tier is $4.75 per 1,000 gallons for anything more than 15,000 gallons.

The discussion began as the board compared water usage between a three quarter‑inch meter and a one‑inch meter. According to Francom’s report, the average monthly usage was 13,570 gallons in May for a three quarter‑inch meter, and 28,824 gallons for a one‑inch meter.

Francom explained a one‑inch meter actually uses almost twice as much water as the smaller meter in the same amount of time. Describing a person turning on the hose for one minute, Francom said “Instead of using 10 gallons, they’re using about 20 gallons.”

Francom stated water is more expensive now and, because of problems with the Cave Creek Water Company supply, Carefree has had to purchase more water off of Scottsdale. The CCWC experienced some water shortages in June after a pump failed, and Francom has stated at prior water board meetings there have been supply problems since Cave Creek bought the water company in April.

The upside to this, according to Francom, is that the town is using more CAP water, which decreases the need to pump groundwater. “Which in the long run is good,” he said.

Fulcher pointed out that the water purchases from Scottsdale were the biggest impact to the water company’s finances, totaling $197,199 through the last fiscal year with one more month to go.

The monthly operating statement for the CWC shows $25,841 was spent just in the month of May alone on Scottsdale Water, $4,528 more than what originally was budgeted.

Turning back to the possible water rate hike, Fulcher told The Desert Advocate after the meeting there are several factors working against keeping the rate steady, including the increasing cost of CAP water and just the rising costs of doing business, i.e. electricity and fuel costs.

“You have all these things going on,” he said. “We’re at the point where we have to raise rates. We still have the same demands with a limited amount of people to spread the costs to.”

Francom told The Desert Advocate that the water company will have to take around $200,000 out of its reserves this year to meet all the debt obligations and that the water rate hike will address that problem.

Francom also offered an alternative to the board of directors for the future, pointing out the water rates are raised about every three years. However, that usually results in one large rate hike that can really impact budgets. He suggested in the coming years to review water rates every year.

“Perhaps then we’ll only have to raise rates two or three percent a year instead of a 20 percent hike every three years,” Francom said.