Sedona AZ (May 23, 2012) – Some fifteen years ago, the voters of Sedona Arizona approved bonds to finance the wastewater system that runs underground for nine miles from the Chapel area to the treatment plant west of town on SR 89A. The original cost was somewhere between $75 (seventy-five) million and $90 (ninety) million dollars. This debt is now around $60 (sixty) million dollars.
For a city of ten thousand residences, this debt comes out to be about $6,000.00 (six thousand dollars) for every man, woman, and child in our city.
We also will spend in fiscal year 2012 approximately $5.6 (five point six) million in debt service. This debt will not be satisfied until 2027.
An additional $5 (five) million dollars per year from sales tax revenue is devoted to subsidizing the true cost of operating the wastewater system.
Single family residence homeowners presently pay approximately $40.00 (forty dollars) per month for wastewater service. Should we privatize our wastewater system by selling it to a private contractor?
If we do this, it could eliminate our long-term debt and remove the city from operating and maintaining the wastewater system. This would free up some $11 (eleven) million dollars annually which could be used for immediate drainage and flood control projects, and better internal street maintenance.
We could also afford to remove the unsightly power poles along SR 89A and replace them with underground utilities.
The downside of this proposal is that the monthly residential wastewater service charge will have to go up.
A private contractor, such as the Arizona Water Company or Waste Management, will be regulated by the Arizona Corporation Commission and would have to make a profit. This could possibly cause the present residential wastewater service rates to rise two or three times, to about $100.00 (one hundred dollars) a month.
The Sedona wastewater system is an enterprise fund. It is supposed to operate at the true cost of its services. This historically has not been the case.
From its inception until recently, the Sedona monthly residential wastewater rates remained unchanged for 14 years at $32.54. The City Council approved a five year plan to gradually raise the residential wastewater rates. The residences are now paying more of the true cost of operating the wastewater system and thereby freeing up some of the sales tax revenue for other city needs.
Sedona lives on the sales and bed taxes paid by tourists who visit our city. The three percent sales tax (3%) and three percent bed tax (3%) generate approximately $10 to $12 (ten to twelve) million dollars annually. This essentially funds the city’s operation.
The trade-off is keeping the wastewater residential rates artificially low by subsidizing them with sales tax dollars, or selling our wastewater system and paying off our long-term debt. The latter approach could possibly immediately release approximately $11 (eleven) million dollars annually for other pressing city needs.
I know it will be unpopular to expect residents living on fixed incomes to pay the true cost of their wastewater service. This is especially so as they have grown accustomed to having low rates provided by sales tax dollars.
I am merely submitting an idea that needs to be seriously explored for the long-term financial health of our city.
This Eye on City of Sedona article written by Sedona City Councilor Dan McIlroy and submitted by the City of Sedona Arizona expresses the opinion of Councilor McIlroy and does not necessarily reflect the opinion of the Sedona City Council or the City of Sedona.
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McIlroy is a hypocrite. He has voted for so much other “waste” it is ridiculous. His latest sin was his vote to give the Chamber of Commerce another $100K. Now the incompetent wastrel has the audacity to lecture us about fiscal responsibility and how tripling our sewer fee will make drainage and road maintenance possible.
McIlroy repeats the tired line that is meant to guilt trip us all into thinking sewer rate increases are OK and to be expected: “…the Sedona monthly residential wastewater rates remained unchanged for 14 years at $32.54.” That’s true. But it is only half true. The full truth is that for fourteen years residents were ripped off. Cottonwood’s sewer fee was $5.95 fourteen years ago and has only now been raised to $23 per month. Flagstaff was $7 fourteen years ago and now is $21 per month.
McIlroy is also a lousy historian. He writes of the sewer system that, “It is supposed to operate at the true cost of its services. This historically has not been the case.” Total hogwash. It was primarily the commercial interests along the creek that were polluting, not residents. Building the sewer was tied to incorporation and the desire for continued development. Residents were promised then that the sewer would be subsidized by sales tax. That promise was a major factor in getting residents to agree to incorporation.
Gosh darn it, Warren. How the heck do you expect for the city to continue to fund the $100,000 annual increases to the exisiting $500,000 allocated to the Chamber of Commerce if they don’t increase your useage fee of the sewer system? (oops maybe Wastewater Treatment Plant is the proper term)
Just be grateful that you aren’t one of those in the flood areas having to hire an attorney to rightfully collect city inflicted damages.
Having personally travelled that route not once but twice, I’m able to attest with some measure of credibility that a Letter of Intent from an attorney is frequently the only way lowly citizens can be heard.
Even though faith may be just a sad memory, keep smiling. It’s good for the blood pressure. :-)