Dec. 9—Gilbert residents will see an increase in what they pay to get rid of their dirty water and to use reclaimed water, but how much is a discussion the new council will have next year.
Town Council last week approved publishing a Notice of Intent to raise the rates, but put off deciding the exact hike until February so that new council members can weigh in on the matter.
Assistant Public Works Director Eric Braun had presented options for rate increases at the council’s November retreat and Public Works Advisory Board meetings.
He explained that the town’s current wastewater funds will not cover the operating and repair costs for its sewage infrastructure needs over the next five years.
Braun reminded the council that the town’s four utility rates — for water, garbage, wastewater and environmental compliance — are reviewed every two years to determine whether revenue will be sufficient for operations and maintenance for their systems.
Last year, potable water and garbage rates saw an increase as per the bi-annual review, and this year the Public Works department looked at the other two rates.
The environmental compliance rate, a flat fee for checking air quality and storm water runoff, will not be raised.
But Braun said, “There is work to be done to correct insufficient past investments in the maintenance and rehabilitation of the systems that allow us to enjoy quality services” when it comes to wastewater.
Braun showed a 2024 inspection video of sewer pipes installed in 2005 that showed many vital parts had corroded and needed advanced repairs.
But the problem is not a Gilbert-only problem, he said.
A 2022 EPA report presented a nation-wide infrastructure gap of about $630 billion with Arizona accounting for $4.7 billion.
This, coupled with inflation in construction and maintenance costs, means that Gilbert must beef up its wastewater fund to work on its sewer systems.
“We will retrace the path that you have already trodden to discover our pains, as well as our plans, to make sure we’re a reliable and environmentally stable sewer and reclaimed water utility,” Braun said.
Braun also explained that the rate hikes will allow for the town to maintain an adequate balance in its funds, which in turn will ensure that Gilbert will have money for emergencies or economic downturns.
This is also why Gilbert is rated Triple A in its bond ratings, he said.
“There are less than 50 communities in the country rated triple A on their bonds, and Gilbert is one of them. This elite rating ensures that Gilbert can secure the best interest rates when bonding,” he said.
Braun noted that the town’s $1 billion in wastewater system assets includes 22,000 manholes, 912 miles of gravity sewer, 16 lift stations, 30 miles of force main pipes and two wastewater treatment plants.
In the next five years, it will need manhole rehab projects, odor control work and reinforced mains to avoid any breaks.
In addition, the town’s two reclamation plants, Greenfield and Neely, require repairs.
The Greenfield plant is co-owned by Mesa and Queen Creek and Gilbert’s share in operating it is already projected to exceed budget by $3.5 million in the next five years, according to Braun.
The Neely plant is managed by a third-party vendor and also needs some repairs.
The water from these plants makes its way after treatment as reclaimed water into four town recharge facilities, with the Riparian Preserve being one the biggest users.
All this work has been charted for the next five years by Gilbert’s Public Works Department within 22 projects for a total of $230 million and much of 2024-25 fiscal year projects already were pushed forward because of a funding shortage.
The operating fund is seeing a $38 million shortfall while the repair fund has a $68 million shortfall.
Braun said if some projects had not been delayed, “the rate recommendations would have been even higher than the initial capital plan needs — representing a 160% rate increase.”
“We’ve left as much of that plan on the cutting room floor as possible through our risk benefit process to get the lower increased options before we do today.”
The two options for addressing the shortfalls are: an all-cash option that would require a 95% rate increase; and a phased cash and bond mix, with a 25% increase in the rates next year and 18% the year after while the town would also need a $110 million bond.
The latter option would cost Gilbert $72 million in interest.
The Public Works Advisory board had recommended the all-cash option, not wanting to burden the residents with paying the hefty bond interest.
Council last week revisited the request it made during the retreat for an extensive media campaign to inform users about the rate hikes.
Chief Digital Officer Kandice Kwan promised “the mother of all communication plans for wastewater and sewers.”
She said the two-pronged approach would be to educate residents on the process and inform them on how the rate hikes will affect monthly bills and what happens if the repairs are not made.
With the median age in Gilbert at 34 and 30.4% of its population between 25-44, Kwan suggested a hybrid digital and traditional media campaign for outreach.
She suggested social media, the town website, community calendars, Gilbert 311, digital displays, “our truck signs on the side of our recycle and trash trucks, and even our utility billing system.”
Kwan also warned traditional methods such as mailers or paper ads would be costly — “just as an example, mailers: $40,000 to reach all residents.”
The administration has asked Council to approve $140,000 as a contingency from the wastewater fund to support the campaign, Kwan said.
Many council members were displeased with having to raise wastewater rates, especially after raising the town sales tax due to go into effect on Jan. 1.
Councilman Chuck Bongiovanni and Mayor-elect Scott Anderson noted that the media campaign did not provide a way for residents to have their say on the increases.
“I see a very thorough plan of teaching and telling,” Anderson said. “I don’t see any hearing. Did I miss something about listening for feedback from our residents?”
Councilman Jim Torgeson said, “The general public does not have a large appetite for this, and just telling them won’t be enough. There has to be a buy off and there has to be an understanding if it’s to happen.”
Mayor Brigette Peterson agreed, saying, “It is important to make sure that the public has a place to come and be heard and listen.”
Councilwoman Kathy Tilque asked the that examples of the utility bills be included in the campaign.
“Perhaps it’s part of education, but what I was hoping to hear tonight was an example of my bill, because I think that’s what the residents want to hear. How does it really impact me?” she said.
There was confusion among council members about whether they had to choose an option at last week’s meeting.
Braun suggested that they give the Notice of Intent on the higher all-cash option, to be in compliance with state law and for an easier adjustment if the cash/bond mix is finally selected.
Delaying the hikes was also not an option, as suggested by some council members.
“Let’s say by one year, there’s still a $240 million gap we’re trying to bridge. Instead of going from $33 a month to $62 a month, which is a $29 increase, if we delay it one year, it needs to be a $45 increase because of that 12 months we’re losing,” Councilwoman Yung Koprowski said.
The council set a public hearing date of Feb. 11 on the rate hikes after a 6-1 vote, with Torgeson dissenting.
“I’m not happy with my back against the wall,” he said. “I’m not happy with presenting people with yet another increase in things, and nobody has knowledge about this at this point, as far as the public is concerned.”
By state law, municipalities need to have a 60-day gap from the notice of intent to the public hearing.
If the council’s public hearing in February results in a decision to raise rates, residents will see the increase in their April bills.