Notice of Intent to Adjust Water Rates and Fees

The City of Tucson | Tucson Water have entered a Notice of Intent period, effective through Tuesday, June 17, 2025, regarding proposed adjustments to:

  • Differential Water Rates for customers located in unincorporated Pima County
  • Water Conservation Fee for all Tucson Water customers
  • Green Stormwater Infrastructure (GSI) Fee for Tucson Water customers located within the City of Tucson

This public notice is part of the formal process required before any changes to rates or fees may be considered by the Mayor and Council. Public input is encouraged and will be included in the official review process.

Watch a summary of the proposed rate adjustments from Tucson Water director, John Kmiec.

Proposed Differential Water Rates

Tucson Water is presenting an option to adopt differential water rates for customers who live outside the city limits in unincorporated Pima County.

Key considerations:

  • While 27% of Tucson Water customers live outside city limits, they require 36% of the water distribution infrastructure.
  • It is more expensive to provide water service to areas outside of Tucson due to wider service areas and higher peak usage demands.
  • These extended service areas require larger and more complex infrastructure, leading to higher operations and maintenance costs.
  • Currently, City of Tucson residents share in the costs of serving these areas, including infrastructure investments and associated risks.

To address this imbalance, Tucson Water is proposing a differential rate structure where customers in unincorporated Pima County would pay a 16–23% higher rate than customers within city limits. The range is based on the widely used Utility Basis Model for cost appropriation. More information about this financial model can be found in the links at the bottom of this page.

This approach is:

  • Legal – supported by Arizona state law and upheld by the Arizona Supreme Court.
  • Standard practice – most major Arizona cities, including Phoenix, have similar structures--Phoenix charges up to 50% more for outside-city customers.
  • Revenue neutral – this change does not generate profit but helps ensure costs are shared fairly.

The differential rate change may take effect in August 2025. Currently, there is a planned 5.5% water rate adjustment that is scheduled for July 2025. Council may consider delaying the 5.5% increase to time it to occur in August, if a differential rate structure is adopted. If the differential rate is not adopted, the 5.5% approved rate change will take place in July 2025, as previously adopted.

Proposed Fee Adjustments: Conservation and GSI

Tucson Water is also proposing adjustments to two important program-related fees:

Water Conservation Fee

  • Proposed Increase: $0.05 per Ccf (hundred cubic feet)
  • Purpose: Restore program funding to pre-inflation levels; support smart metering infrastructure
  • Estimated annual revenue: $1.75M 
  • Supports:
    • Customer rebates and incentive programs
    • Public engagement and opportunities for low-income households
    • Commercial water-saving opportunities
    • Homeowners Association education and conservation support
    • Research for long-term demand management
  • Aligned with Tucson Water’s One Water 2100 Master Plan

Green Stormwater Infrastructure (GSI) Fee

  • Proposed increase: $0.02 per Ccf (hundred cubic feet)
  • Purpose: Offset increased construction costs that have risen over 50% since 2020
  • Estimated annual revenue: $461,450
  • Supports: Neighborhood scale sustainable stormwater solutions like rain gardens, trees, and green spaces that absorb and filter rainwater

Public Hearing and How to Participate

A Public Hearing is scheduled for: Tuesday, June 17, 2025
Location: City Hall, Mayor and Council Chambers, City Hall 255 W. Alameda Street

Meeting Schedules and Agendas

At the hearing, Tucson Water will present its findings from the impact analysis, and community members will have the opportunity to provide public comments.

To submit comments in advance, please email: WaterRateInfo@tucsonaz.gov

Your feedback will help inform the Mayor and Council as they consider these proposals.

Additional Resources

For more detailed information, please review the following materials:

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