Possible sewer rate hike shocks Sedona restaurants

SEDONA, AZ (February 3, 2010) - Some Sedona restaurant owners are biting mad over a proposal to raise their sewer fee rates by 28 to 32 percent next year and almost 300 percent within the decade.

On Feb. 9, the Sedona City Council will consider moving forward with recommendations made by Camp, Dresser & McGee, a firm specializing in wastewater treatment-facility financing, to potentially raise the sewer costs for restaurants with large seating capacities from $10.08 per seat, their current rate, to $29.86 per seat by 2019.

A raise in sewer rates is also suggested for all users in the community except for multi-family dwelling units, where a projected decrease of 26 percent is recommended.

The $42,640 Wastewater Rate Study also recommends raising the restaurant sewer fee to $13.29 per seat in 2010.

The news of the large increase for restaurants reverberated like a shock wave through the food service community.

“This is an abomination,” said Andrea Di Luca, chef and co-owner of Dahl & Di Luca Ristorante Italiano. “Such a thing will make it almost impossible for us to continue to be responsible and maintain high quality.”

He said he could not believe such a rate increase could even be considered with the hard times so many restaurant owners are facing in this economy.

General Manger Ken Fega of Shugrues Hillside said raising sewer rates for restaurant owners on S.R. 179 is like pouring salt into a wound.

“With all this construction on S.R. 179 we have been held hostage by ADOT for too long,” he said. “Now they want to raise our sewer rates to make it even more difficult. What do they want to do? Turn us into a ghost town?

He said restaurant owners have to ban together to fight the increase.

“I don’t know what we can do,” he said. “We need a coalition. We have to protest.”

Olde Sedona Bar & Grill Owner Mike Smith said if a coalition was formed he would join.

“I would be a part of it,” he said. “They are already charging too much. It would take a big chunk out of our business.”

CDR Principal Consultant Grant Hoag, explained the restaurant sewer-rate rate increase, as well as comprehensive rate increases for all customers, were necessary to keep the Wastewater Treatment Plant fiscally sound in the face of dwindling local sales tax revenues.

A sales tax revenue shortfall of about $673,000 for the wastewater fund is expected for next fiscal year.

Hoag said the reason restaurants would face the highest increase is because restaurants produce stronger water and charges would “be scaled to the number of seats restaurants have.”  Water strength depends on the amount of solids, detergents, fats, grease, and other waste products in the water that have to be removed.

“Fees are broken down to different costs,” he said. “There is the cost of curing the water; the amount of flow; removing the solids; costs of administering the water; etc. We have to identify how much wastewater strength is dislodged into the system.”

Councilwoman Nancy Scagnelli questioned why restaurants were singled out for such a large increase.

“I think we have some of the most expensive Mexican food,” she said. “However, I know restaurants are struggling in this recession. People eat less. I wonder if we should find another way.

Hoag answered by recounting his stop in the Village of Oak Creek on his way into Sedona at a bike shop that has a cappuccino machine.

“How do we know the water strength between making bikes and cappuccino?” he asked.

Hoag also recommended charging land owners who have empty lots where a sewer line runs past the property even if there is no connection.

The sewer fee will be called the “Capacity Standby Fee” and will cost $23.50 per lot per month in 2010 and $27.02 per month in 2011.

Hoag explained that the city incurred costs in building the sewer lines to handle the sewer needs of whatever is built on that lot. Therefore, lot owners should contribute to the costs.

Mayor Rob Adams questioned why someone not using the sewer line would have to pay for it.

“I have a hard time charging people for something that they are not using,” Mayor Adams said.

Hoag said that’s the city’s choice.

“What you choose to implement is a matter of policy and financial planning,” he said.

Councilman Mark DiNunzio asked how common standby capacity fees in Arizona were.

“I don’t see a lot,” Mr. Hoag said. “It’s a rare event for me.”

Councilman Cliff Hamilton asked if there was a difference between charging someone with a lot with nothing on it where a sewer line passes and charging someone with a septic tank that is not using the line.

Hoag said even though it is not one of the recommendations, he would be in favor of charging a septic tank owner as well.

“I would charge the septic tank owner because of the possibility of contanimation,” he said. “It is a matter of incremental adjustments benefitting a community. You need to build a pipe to contain full capacity.”

On general public sewer use, Hoag suggests residents pay $600 a year per home. Homeowners are currently paying $390.

He is also suggesting raising the capacity fee from $5,325 to $7,669.

His recommendations encompass a number of plans, with the goal of one day making the wastewater plant self-sufficient.

On Feb. 9 council will consider directing staff to set wheels in motion to establish recommended fee changes that will later be reviewed at a public hearing.

The city must give a Notice of Intention to increase water rates at least 30 days after the notice is adopted.