Dec. 9—Residential and commercial customers in Mesa will see an uptick in their bills beginning Feb. 1 for utilities such as water, wastewater, trash and recyclable pick-ups.
City Council last week unanimously voted 7-0 to approve the hike as over 20 residents called it burdensome and said Mesa needs to cut its spending and be leaner instead.
The 165-person-capacity Council Chambers was filled to standing-room-only and Mayor John Giles repeatedly scolded the audience to refrain from clapping after residents spoke.
“Doing the rate utility increase is something that is not our favorite thing to do but is part of our business plan,” Mayor-elect Mark Freeman said at the Dec. 2 meeting. “About four years ago we chose not to do a rate increase and so voted zero.
“But it cost us the next year. It was almost an 8% increase the following year.”
For the typical residential customer who uses 6,000 gallons of water and receives city wastewater and solid waste services, the anticipated monthly increase is $5.60 or 5.6%, according to officials.
Customers who also receive the city’s electrical and natural gas services will see increases in those as well. Commercial customers are seeing much larger increases, which reflect the fact that they are the major consumer of the city’s water supply and impact infrastructure more.
Freeman pointed out that for low-end users — 3,000 gallons of water with wastewater and solid waste services, the monthly increase is $4.69.
“I know that’s not the issue,” he continued. “What I’m hearing is you think we have a problem spending our money in the city. I get that. We are always trying to look for efficiencies.”
Freeman, a retired Mesa firefighter, said his focus is ensuring the city has strong public safety in place.
“Listening to you, you wanted more police officers out in our community,” he told the audience. “These funds go directly to boots on the ground. If we didn’t have to raise the utility rates, every one of us would vote no.”
Because Mesa does not have a primary property tax, it transfers utility revenues to the General Fund to support public safety. Eighty percent of the General Fund goes to public safety, City Manager Chris Brady said.
According to the city, $114 million, or 25%, of the utility funds was allocated for police, fire and municipal court for Fiscal Year 2024-25 and 5%, or $23 million went to support services for public safety and for parks and libraries.
The approved increases are expected to generate $29.6 million but it won’t be enough to cover the anticipated increase in the Utility Fund’s operating costs for next fiscal year.
Sonny Allison was one of the 22 residents who spoke out against the hikes. A petition against the increase garnered over 2,000 signatures.
“The community I live in are mainly 55-plus people,” he said. “They cannot afford this increase.”
“I would bet the farm that none of you have gone into your district and asked the people that you are supposed to represent if they are comfortable with this increase,” Allison said. “I know you haven’t. And shame on you.
“I guarantee that the people you supposedly represent are in agreement with me that this increase is not necessary.”
Earl Taylor questioned the city’s spending, pointing to the new $32.3-million Council Chambers and the council’s vote last December to hike elected officials’ salaries by 7%, which takes effect in January.
“I’m not sure you feel the financial pinch that many families are now experiencing, especially since you voted to give yourself a significant salary increase,” Taylor said. “No ordinary family can simply raise their income with a simple vote as you did.”
Jeremiah Seman said that a majority of the people in the GOP Legislative District 6 Precinct oppose the increase.
Seman, who said he was a precinct committee man, questioned if the three firefighters and one police sergeant who spoke in favor of the “modest” increases were paid to do so.
“We all know it’s not a modest increase,” Seman said. “Mayor lame duck here doesn’t have to worry about his seat but let me tell you something: The rest of you on the council, you’re waking a sleeping giant.
“There’s a whole lot of people here that will knock on every single door and tell every member and every citizen of this city what you are doing to us all. We’re all opposed to it. You need to vote no on this. You need to reconsider what you are doing. And Mayor Giles, goodbye.”
Giles is termed out of office after serving a decade.
District 10 state Rep. Barbara Parker, R-Mesa, said she was asked by her constituents to speak on their behalf.
“On behalf of them I am telling you they are hurting,” the lawmaker said. “Even $1 makes a huge difference.
“The staff is saying that the sky is falling. It is not. It never does. The fact that we use the threat of fear or emotion that we are going to cut police and fire is so disingenuous and inappropriate.”
She told the firefighters and police in the room not to let the city use them as “pawns.”
Parker also said it was inappropriate to seek a ratepayer’s increase so soon after voters in November approved two bonds totaling $260 million — $90 million for public safety-related projects and $170 million for projects related to recreation, education and culture.
“I can tell you on behalf of the state, we were able to cut the budget, balance our budget, give money back to the taxpayers and fund every single program,” Parker said. “And if the State of Arizona can do it, Mesa can do better.”
A few residents asked the council to table the increases and to discuss the issue further during budget talks in April and some volunteered to help staff find ways to reduce spending.
According to Brady, if council opted not to raise rates this year, the city would be looking at a 15% increase the following year.
Brady attempted to address all the issues raised by the speakers. He said that the city is listening to residents and that it runs an efficient organization staffed with some of the best local government finance and budget people.
He added that staff continuously look at how it compares with other utilities, such as SRP and APS, and at the standards to ensure that Mesa is efficient and lives within its means.
An indicator that Mesa is fiscally well-managed is when it goes out on the market to sell its debt, according to Brady.
“We are required to have outside Wall Street firms evaluate and assess Mesa’s credit,” he said. “Since I’ve been here, it has improved and it’s stayed steady and it does very well. It’s a very strong credit rating.”
Brady also pointed to outside financial audits, which shows Mesa “has done a very good job.”
He said that the city’s reserves in the General Fund and in the Utility Fund, which make it appear the city “was overspending,” are required by the rating agencies in case of a pandemic or an economic downturn.
He pointed out that the two voter-approved bonds are for capital projects while the General Fund pays for day-to-day operations such as wages, utilities and other operational costs.
Mesa is facing a financial squeeze on a number of fronts.
The city General Fund next year is expected to lose $20 million in residential rental tax after it was repealed by the state, and get $8 million less in state shared revenues due to the flat income tax imposed in 2022.
Mesa also is experiencing inflation with the cost of doing business increasing. And there are three sizable capital projects underway totaling approximately $510 million, which Brady says is an investment in the city’s future.
He highlighted the Central Mesa Reuse Pipeline with an estimated price tag of $210 million.
“Mesa has a unique opportunity to acquire a unique source of water that no other community has access to,” Brady said. “We are building a pipeline so we can exchange water with the Gila River Indian Community.
“But in order to do that we have to build a pipeline that literally goes from one end of Mesa down to the other end.
“Yes, it’s very expensive and it shows up on our books that way. But that water supply is the cheapest water we can buy in our entire portfolio. It’s guaranteed for over 100 years and it’s the highest priority water meaning when there are cut backs it would be the very last to be cut back.”
He added that the city will recover that project’s capital cost in six to seven years.
Brady also referenced previously presented charts that showed the cost of living in Mesa is less than in communities such as Gilbert, Tempe and Glendale and the city was in the middle of the pack in utility costs even with the increases.
He addressed Mary Maybeno’s comment questioning why council voted itself a pay raise for a job she said was part time.
“To suggest that this council is part-time is not true at all,” Brady said, noting the council members also work nights and are the busiest during the weekends. “I would definitely consider them full-time employees.”
Councilwoman Julie Spilsbury acknowledged that no one wants rate increases but in her opinion after considering all the information, it’s “well-worth the average customer having a modest increase.”
She also called out Parker’s comment.
“I don’t think mentioning public safety is a scare tactic because it’s true,” Spilsbury said. “Public safety is the majority of our budget. So it would be impacted.”
She noted that “being heard is not the same as someone agreeing with you.”
“We are a city of 520,000 people and … every single one of our districts represents almost 90,000 people,” Spilsbury said. “Some say that we have to do what you tell us to do and as elected officials we have to do what is best for the entire city, not necessarily what 100 of you or a thousand people say the loudest — not out of 520,000.”
Giles said that the accusation that the city has a spending problem is not borne out by facts.
He said Mesa’s government spending per capita is less compared with a vast majority of the surrounding cities.
“Mesa is proud of the fact that our middle name is affordable,” Giles said. “That has been our reputation my whole life and even before that. … Mesa continues to be committed to be an affordable city.”
He added that across the country utility rates are increasing and what Mesa is proposing “is far less than what other cities and what other utility companies are doing.”
He said that Mesa wrestled with the issue for months and the proposal before the council is the bare minimum increase because the city dipped into the reserves and postponed some large capital utility projects that will eventually need to be done.
Following the vote, a man in a Trump T-shirt from the back of the audience shouted out, “You’re all fired.”