Letter to The Editor: ARS 9-511.01 Water and wastewater business; rates; procedures; responsibility for payment

An email to the Sedona City Council
By Jean Jenks, Sedona Resident
(December 14, 2017)

Hello Mayor Moriarty and City Councilors:

Decided during the 11/29/2017 Council Meeting was that sewer rate increases were for six years. The Assistant City Manager and the Financial Services Director wrote on Page 13 of the Proposed Budget FY 2016-17 about nine years of sewer rate increases via their City Manager’s Office Memo dated April 21, 2016.  The statement I refer to says: “The  2013-2014 rate study, adopted by Council, included an annual 4% increase to all the City’s sewer rates through FY20 with a 3% increase in FY21 through FY23.”

As I have written the Council before on a few occasions or more, the annual sewer rate increases were for FOUR YEARS (FY 2015-FY 2018).  I was living in Sedona in 2014, I know about the rate increases, and I was opposed to them.

Please refer to:

• May 27, 2014 Council Mtg Motion: Motion: After 1st reading, Councilor Ward moved to approve Ordinance No. 2014-06, amending Title 13, Division of the Sedona City Code (Wastewater), and approving the changes in the rates and rate structure all as set forth in the exhibits attached to said ordinance. Seconded by Councilor Litrell. Vote: Motion carried with six (6) in favor and one (1) opposed. Councilor Martinez opposed.

• May 27, 2014, ORDINANCE NO. 2014-05 EXHIBIT A:   WASTEWATER FEE SCHEDULE 2014–2018, Annual Rate-Based Revenue Increase:  4% FY 14-15, 4% FY 15-16, 4% FY 16-17, 4% FY 17-18.

• March 17, 2014, NOTICE OF INTENTION TO INCREASE WASTEWATER RATES OR RATE COMPONENTS, FEES, OR SERVICE  CHARGES statement: “Adjustment of wastewater rates for the different customer account billing classifications as set forth in Table 28 of the Report (Attached hereto). These adjustments will be based on an initial cost-of-service adjustment to the current rate for each classification, plus a uniform increase of 4% to all unit rates for the new rates and fees effective in Fiscal Year (FY) 2014-15 on July 1, 2014. Thereafter, these rates and fees will be increased by 4% per year at the beginning of each year on July 1. These annual increases will continue for the next three years through FY 2017-18, as indicated in Table 28 of the Report (attached hereto).” TABLE 28, RECOMMENDED MONTHLY SERVICE RATES, includes a Retroactive Cost of Service Adjustment for FY 2013-14 (Current Year 1) and an Annual Rate-based Revenue Increase of 4% for FY 14-15, FY 15-16, FY 16-17 and FY 17-18 (Year 2 through Year 5).

• January 15, 2014, 2013 WASTEWATER SYSTEM RATE STUDY UPDATE CITY COUNCIL HEARING — JANUARY 15, 2014 DISCUSSION OF DRAFT REPORTS SUMMARY INFORMATION meeting handout (2nd Page): “A.i.  Approve the Financial Plan Recommendations for a 4% per year increase in rate-based revenues for FY 2014-15 through FY 2017-18;”

• January 15, 2014 Action Minutes: “Council agreed by majority consensus to approve the financial plan recommendations for a 4% per year increase in rate-based revenues for FY 2014-15 through FY 2017-18;”

• January 15, 2014 ACTION ITEM LIST statement of legal actions taken at the Special City Council  Meeting: “Council agreed by majority consensus to approve the financial plan recommendations for a 4% per year increase in rate-based revenues for FY 2014-15 through FY 2017-18;”

State statutes establish the public notice and public hearing process. ARS 9-511.01 requires adoption of a Notice of Intention to Increase Wastewater Rates at a regular Council meeting and setting a date for a Public Hearing not less than 30 days after adoption of the Notice of Intention. I point this out because I was very shocked and very troubled when I read Cherie Wright’s City Manager’s Office Memo RE: “City Council FY 2019 Budget Retreat” scheduled for tomorrow. Wasn’t it decided [inaccurately] during the the November 29th Council  Meeting that the sewer rate increases were 4% for each of six years? WOW, three rate increases of 3% per year are coming down the pike under Wastewater Fund Rates and Subsidies on Page 41 of the 12-14-17 Complete Packet. Check out Ms. Wright’s note on Page 41. “Note: Rate increases were adopted by Council through FY 2019-20 [NO, they were not]. The remaining rate increases [of 3%] and all of the subsidy percentages are based on recommendations in the 2014 Rate Study approved by Council.” Page 41 also has a chart that lists five years of unadopted Rate Increases, FY19 through FY23. The major heading of Forecast Assumptions that Wastwater Fund Rates and Subsidies comes under is on Page 36. As the Council can see from the above bullets these five years of assumed increases were not included in the 2014 public notice and public hearing process required by ARS 9-511.01. Obviously, the Council approved the 2014 Rate Study, however, NOT all so-called recommendations. Since when is the City Financial Services’ Director incestuously involved (my opinion) with annual WW rate increases? And didn’t I hear stated during the November 29th Council Meeting that the Wastewater Fund Long-Range Forecast was accurate? This is not something I would buy. 

In my opinion, the City is out of control and running amok and City management is doing nothing. Why shouldn’t there be real consequences for using false data in annual budget proposals and budget forecasts, ignoring a state statute, misleading people and betraying the public trust?

Sincerely,

Jean Jenks
Sedona, AZ

Attached:

• Notice of Intention to Increase Wastewater Rates, March 17, 2014
• 9-511.01 – Water and wastewater business; rates; procedures; responsibility for payments