Proposed Rates: Fiscal Years 2021-2024

Town Hall presentation on proposed water rates

2020 Town Hall Water Rates presentation pdf
Scroll down to submit public comments to Tucson's Mayor and Council.

On March 3, Tucson Water brought before the City of Tucson Mayor and Council a proposal to increase water rates over the next four years.

Tucson Water does not make a profit, does not receive tax revenues, and must recover all of its costs from water customers. The utility is requesting these rate increases to maintain a reliable, sustainable system that provides high-quality water to its more than 700,000 customers. The proposed rates are unanimously supported by the Citizens Water Advisory Committee exiting Tucson Water website. Here are some important elements of the proposal:

Driving efficiency

Tucson Water continually works to make operations as efficient as possible while providing safe, high-quality, reliable service. Compared to the year 2000, Tucson Water now serves approximately 100,000 more people, while our total number of employees has not increased. Just one example of how we are using technology to improve efficiency—we are using Artificial Intelligence to predict and prevent water main breaks before they happen, saving on costs of emergency repairs, and eliminating $5 million in previously planned capital improvements

Replacing aging infrastructure

Tucson Water maintains nearly $2 billion in infrastructure including over 5,000 miles of pipe, 21,000 fire hydrants, and 200 wells across our 400 square mile service area. Much of this infrastructure is several decades old; some of our pipes have been in the ground since before World War II. As our system ages, the overall cost to repair and replace it is increasing. Our rate proposal includes a plan to accelerate replacing old water mains in neighborhoods that experience frequent main breaks—meaning fewer service interruptions and traffic restrictions, and less wasted water from leaking pipes.

Managing debt responsibly

Tucson Water issues bonds to fund large projects, borrowing money at very low interest rates that is repaid over many years. This spreads the costs of paying for assets that will last decades (like water mains, wells, reservoirs) across both the current and future customers who benefit from them. However, maintaining high levels of debt means that a high proportion of the utility’s budget is a fixed cost–similar to a large mortgage payment that must be paid every month, no matter what—and allows less flexibility to adjust the budget when there are changes in the economy or in customers’ water use. The proposed rates package would allow Tucson Water to reduce its overall level of debt, which will increase budget flexibility and also reduce borrowing costs (interest).

Securing water for the future

Today, all of our customers’ water use is met by Colorado River water that is delivered to us—at a cost (over $25 million last year)--from the Central Arizona Project. To prepare for future shortages on the river, Tucson Water stores excess Colorado River water in local aquifers. Currently, we store about one year’s worth of water (the amount our customers use in a year) every two years. Purchasing and storing this water is critical to ensuring our community can continue to thrive in a hotter, drier future. The proposed rates will allow Tucson Water to continue this effort.

The table below indicates representative single family residential uses and the associated monthly cost (before taxes) for the water portion of a utility services statement.

Ccf/Month
(1 Ccf=748 gallons)
 
FY 2020
(current)
FY 2021
​(5.5%)
FY 2022
​(4.5%)
FY 2023
​(4.0%)
FY 2024
​(4.0%)
0* $16.33 $17.80 $18.78 $19.56 $20.38
3 $24.94 $26.76 $28.34 $29.61 $30.97
8
(average usage)
$41.04 $43.54 $46.24 $48.45 $50.84
15 $73.38 $77.32 $82.28 $86.60 $91.09
20 $119.33 $123.76 $130.17 $134.89 $139.65

*This is the service fee for a 5/8” meter, which the majority of residential customers have.

View current rates and charges

To read the comprehensive proposal that was made to Mayor and Council, click here exiting Tucson Water website. (Scroll to Item 8.)

A planned live, online town hall has been delayed due to the impacts of coronavirus on our community. This page will be updated as necessary. 
To provide feedback on the proposed rates, please fill out the form below. All comments will be provided to the Mayor and Council.