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The Verde Independent | Cottonwood, Arizona

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8/9/2014 3:20:00 PM
Cottonwood eyes water, wastewater rate increase at work session this week

Jon Hutchinson
Staff Reporter


COTTONWOOD-- The Cottonwood Council is getting its first look at the annual proposed utility rate adjustment Tuesday. A work session of the council, open to the public, is set for 6 p.m. Tuesday in the Cottonwood Council Chambers, 824 N. Main St.

And while the Tuesday night meeting is intended to sample the Cottonwood Council mood and suggestions on rate increases, the board is sure to hear to also hear from rate payers and especially those who live outside the city limits who pay a higher rates than city dwellers.

A public hearing on the "intent to increase water and wastewater rates" is scheduled Oct. 2 and because a crowd is possible for the hearing, it is proposed to be held at the Cottonwood Recreation Center. Last year the same meeting filled the auditorium.

Cottonwood has included a rate adjustment as part of the meeting packet information that shows a 6 percent rate increase from 2014 to 2015 in both the base rates and the volume charge for water use.

In October 2013, the city raised rates after two years without an increase. In 2011, rates were increased in the wake of a bond downgrade.

The city's AAA rating was downgraded to BAA on its water bonds, causing the Cottonwood to abandon plans to refinance the bonds to a lower interest rate.

The downgrade is blamed on the city's inability to meet its commitment to the bond holders to adjust rates to maintain a cost to revenue ratio by 135 percent.

With the new attention now paid to maintain that ratio, Cottonwood has begun to adjust rates annually is once again considering refinancing its bonds to get lower interest.

However water rates proposed would faster than estimated in a five-year plan proposed by last year's study. Last year's projection anticipated a 2 percent growth in rates each year over five years. The 6 percent increase would grow rates three times faster than that early projection.

Some citizens are concerned that the city's monopolizing the water system in the Upper Verde has weighed down taxpayers with significant debt for years to come that could impact generations. Sherry Twambley has written the Arizona Corporation Commission to complain about the "inequity" between Cottonwood citizens and unincorporated customers.

Alex Gozdan, also of the Citizens for Fiscal Accountability, has circulated a petition seeking legislation to bring municipal water companies under the oversight of the Arizona Corporation Commission.



-- Contact the reporter at jhutchinson@verdenews.com


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Reader Comments

Posted: Wednesday, August 13, 2014
Article comment by: Remember, not everything you read on the internet is true.

Just because somebody starts adding up random big numbers and typing in all CAPS does not mean it is true. Go ahead and contact the ACC... If you want to wait forever for nothing, if you want the facts and are actually willing to accept them then perhaps a call to the city and its finance manager will get you faster and better results.

Now if your mind is already made up and no amount of fact or reason will sway your position...just keep posting false information to try and scare folks into believing you are correct.

The more you post the less there is to believe, so please... Proceed...


Posted: Tuesday, August 12, 2014
Article comment by: Ouch!! A Verde Village Customer

Ouch!! I understand prices increasing, but my bill increased over 65% and since I live out in Verde Village, we will pay more. This is insane and expensive. I can afford to pay my bill, but there are other people who can't afford water increases. I know there is nothing that can be done, and we have to pay it. But another rate hike is insane. I wish our salaries increased by 65% life would me so much easier.

Posted: Tuesday, August 12, 2014
Article comment by: YOU NEED TO KNOW WHAT'S ON YOUR WATER BILL

$72,053,020 Bond Debt incl. interest
for the Recreation Center that is only recovering 54% of its operating costs, a 2004 and 2006 muni rev bonds for buying four private water companies divided by 9,000 water utility ratepayers = $8,006 per person debt.

NOW THE CITY PLANS TO ISSUE ANOTHER BOND AND MAKE WATER UTILITY RATEPAYERS PAY FOR ITS NEW COTTONWOOD WATER RECLAMATION PLANT & COMMUNICATIONS CENTER ON YOUR WATER BILL. COST? CLOSE TO $16,000,000 + INTEREST FOR THE NEXT 25-30 YEARS.

Contact Arizona Corporation Commission today to stop the city from charging you for all of the city's infrastructure on your water bill: http://www.azcc.gov/


Posted: Tuesday, August 12, 2014
Article comment by: How much of your money does Cottonwood need?

A lot, apparently.

Incredibly bad timing is probably the best thing that can be said about this.

Considering the council recently passed an $80+ million spending spree for next fiscal year, this calls for at least some perspective.

The little town of Cottonwood, only about 11,000 people, is a census designated poverty area. The number of poverty-stricken people living here is considerably higher than neighboring communities, and higher than Yavapai County overall.

Why?

Should we start with the 3% tax on rent? Most financially disadvantaged people can't afford to own, and Cottonwood absolutely nails them with 3% of whatever rent they pay each and every month.

Hmm, put food on the table this week or pay Cottonwood's tax? Thank goodness there's the Mission.

In fact if there's any one reason why the people of Verde Village and Verde Santa Fe chose not to be annexed, Cottonwood's rent tax is probably right up there with the best of them.

And look at the $80+ million on a per capita basis. Cottonwood spends way more per person than Yavapai County, the State of Arizona, and most other Arizona municipalities.

And somehow in just over 20 years we've let this government go from zero debt to the tenth most indebted city in the state!

Rich government. Poor people. This is not a coincidence.

And folks, this is not going to change until we elect some fiscal watchdogs. We need councilpersons who won't just rubber stamp whatever staff wants to do.

What Cottonwood needs is a Bob Oliphant or Chip Davis or Andy Groseta on the council. Somebody tough who'll protect the average taxpayer, the little guy, because it sure looks like nobody's doing that now.


Posted: Monday, August 11, 2014
Article comment by: Have a Heart

Ouch! I did not object to last years water rate increases as I saw the need. But, to turn around the next year and hit the huge senior population in the city with another sharp increase is cruel and insensitive. No matter how we look at it, it was mismanaged in the past to cause the bond ratings to be lowered... and then have a major correction last year and get everyone upset... and now admit the increase was not calculated to be enough so we are going to insult you with another increase? I think the council needs to finds the hearts they seem to have misplaced.

Posted: Sunday, August 10, 2014
Article comment by: Margaret Paddock

Wait a minute! We just had an increase in water rates and Rudy Rodriguez the Financial Director said it could rise 73% within 12 months and 42.2% over 6 years!

This 6% talk is a diversion. Are we going to continue to pay the 67% raise on the old bond plus the other 47% over the next few years PLUS another 6% on a new bond, PLUS look forward to even more increases? And the public has no vote on this!

This is outrageous!

Right now we owe $38 million dollars! The bond is due and there is no money to pay for it. That is why a new bond is needed. And more bonds will be coming due!

City residents � you will also pay for the Reclamation Center. Some of you aren�t even city sewage users but you will pay for it PLUS the raise in salaries.

What�s with this council? They bought water companies as well as the property they couldn�t afford for a city that is mainly low income. Water rates on citizens and non citizens, businesses inside and outside of the city increase but still can not pay for the bond(s). Conducting business in this manner is ruining the credit rating. Then they reward themselves with raises and awards?! Poor performance does not deserve to be rewarded!

What if this new bond isn�t paid on time? Would the poor credit rating even qualify to buy yet another bond or a junk bond at an even higher rate of interest?

This is never going to end unless we, the water users, and that includes businesses demand City Council stop this abuse of power.

Are you finally going to stand up for yourself?

The next PUBLIC workshop meeting is Aug. 12th 6pm across from City Hall.

Don�t just talk, don�t just complain � do something � BE THERE





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