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The Verde Independent | Cottonwood, Arizona

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6/13/2013 2:53:00 PM
Cottonwood City Council hears reasons to hike utility rates
City Administrative Services Manager Rudy Rodriguez: “Cottonwood doesn’t have a choice.”
City Administrative Services Manager Rudy Rodriguez: “Cottonwood doesn’t have a choice.”

Jon Hutchinson
Staff Reporter


The Cottonwood City Council wants to make sure that the public sees the proposed water and wastewater fee increase proposal and has a chance to comment on it before it is approved. A formal public hearing will be held in mid-July or August, but City Manager Doug Bartosh says citizens will have four opportunities to comment before the changes are approved to take effect Oct. 1.

During a work session this Tuesday, Administrative Services Manager and Cottonwood Finance guru, Rudy Rodriguez presented a lengthy Power Point review of the rate study, conducted by his department, council members, staff and Cottonwood citizens as well as a Yavapai County representative. Only a few members of the public attended the presentation.

Rodriguez says, "Cottonwood doesn't have a choice." Noting that shareholders of its 2004 and 2006 Water Bonds have the power to raise water rates themselves if the company does not meet the 1.35 X ratio outlined in covenants.

Mayor Diane Joens says she has worried about that downward bond rating, "It is like your personal finances."

In addition to the demands of the bond agreements, Rodriguez talked about the ongoing cost of system repairs of a crumbling infrastructure. The presentation showed graphic examples of cracks and roots growing in pipes and similar issues.

The presentation also discussed the proposed differential between proposed rates inside and outside the city limits. There are more smaller wells and arsenic treatment systems outside city limits than within the city, Rodriguez says. Cottonwood purchased the Quail Canyon Water system this past year to service Verde Village 6 and 7, in addition to internal customers.

New council member Randy Garrison, whose family formerly owned the Cottonwood Water Works, noted that Verde Village Water rates, once operated by the Cordes Lakes Water Company, were always higher than rates in Cottonwood.

Bartosh says the city saved $35,000 by developing the rate study internally rather than contracting it out.

During Tuesday's council meeting, the city is expected to approve a resolution of the "notice of intent" to adjust rates.

A public hearing on the rate adjustment is proposed for mid-July or August.

There are two readings of the necessary ordinance to adopt the rates and the changes do not take effect until after the second reading.

The entire presentation may be found online at http://www.cottonwoodaz.gov/utilities/COC%20Rate%20Study%20Presentation%20-%202014.pdf

Taylor Waste

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Reader Comments

Posted: Friday, June 14, 2013
Article comment by: Piece Meal Government

It irks me that the city leaders do not provide a full plan of the finances. They knew this utility hike was in the pipeline but you can bet they all conspired to keep a lid on this untility increase until after the voters approved the permanent tax hike. Now they make the argument they have no choice but to Increase utility rates. What other surprises do they have for us? It is not the increases that annoys me as much as the conspiracy to piece meal all of this and think we are too stupid to recognize it.

Posted: Friday, June 14, 2013
Article comment by: Pay off debt, reduce fees

With ample cash reserves ($35 million in 2012), why doesn't Cottonwood just pay off its outstanding debt?

Then they wouldn't have to worry about a credit downgrade, which seems to be a big reason for the proposed increase.

According to city manager Doug Bartosh, roughly half of this $35 million is allocated for debt service, and half to buy things, like the Riverfront reclamation plant.

But the $10-15 million Riverfront plant could either be postponed or reduced significantly in cost, thereby freeing up a lot of money to either mostly or completely pay off the bonds.

A second point for you people living in VSF and Verde Village. The city is charging you for their water development fees which do not benefit you as noncity residents.

Because they now want to charge you more because you are outside the city, you should request these extra fees be dropped for all water customers residing outside the city limits.




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