DOUGLAS — Due to the fact the Douglas City Council did not have all of its council members present for the Sept. 8 regular city council meeting, Mayor Donald Huish opted to table a proposed water/sewer increase that was scheduled to come before the city council that night.

He did allow Luis Pedroza to make his presentation regarding the increase and then welcomed comments from the community. While social media was swarming with people upset with the proposed hike, no one spoke up at the council meeting.

The mayor announced that a Town Hall meeting would be held Wednesday, Sept. 22, starting at 5:30 p.m. at the Douglas Visitors Center on 16th Street. A a variety of topics, ranging from the water/sewer increases, city communication, streets, the port of entry, a grocery store update, street improvements, the homeless population and yard code enforcement would be discussed.

In his presentation to the council, Pedroza said the city of Douglas commissioned a water and sewer rate study from the 65th North Group, a government consulting company, that showed a need for rate increases in water and sewer in order to maintain existing infrastructure and for necessary capital infrastructure needs.

Pedroza reported that the average Douglas resident was paying approximately $21.80 per month while the rest of the county was paying $29.90. Commercial businesses were paying $101.88, while Douglas irrigation fees were $54.78 for the county and $15.75 for the city.

Pedroza noted public water utilities and statewide utilities averages showed a greater cost compared to the Cochise County rates.

The study shows revenue projections without a rate increase for the next six years for the water utility as follows:

FY21: $2,126,999

FY22: $2,160,225

FY23: $2,194,829

FY24: $2,230,834

FY25: $2,268,297

FY26: $2,307,276

Total: $13,268,428

Pedroza emphasized that with expected cash and borrowing expenditures within those six years of $15,679,331, there could be a shortfall of $2,390,902. In order to meet this shortfall, the recommendation is to utilize $1 million in cash balance, borrow for 75% of capital items in FY21, FY22 and FY23, pay cash for CIP in FY24 through FY26, obtain grant funding for water infrastructure, and increase the water rates as follows:

FY 21/22: 2.5% base fees and 5% consumption for an average monthly increase in residential bill of 72 cents.

FY 22/23: 2.5% base fees and 5% consumption for an average monthly increase in residential bill of 40 cents.

FY 23/24: 2.5% base fees and 5% consumption for an average monthly increase in residential bill of 41 cents.

FY 24/25: 3.5% base fees and 8.5% consumption for an average monthly increase in residential bill: of 82 cents.

FY 25/26: 3.5% base fees and 8.5% consumption for an average monthly increase in residential bill of 60 cents.

“The increases to the fees over a five-year period represent an average increase of $2.95 for your average residential customer,” he said.

In regards to the sewer, Pedroza reported the average Douglas resident pays $7.53 when compared to the rest of Cochise County while commercial pays $28.65 less than the average Cochise County business.

The interim city manager presented revenue projections without the increase over the next six years range from $1,997,476 in fiscal year 2021 to $2,215,282 in fiscal year 2026 for a total of $12,863,929.

With expected expenditures within those six years of $12,863,929, there is a shortfall of $340,496. Additionally, the sewer’s fund balance is not adequately funded, currently projected to be at $1,135,040 at the end of FY26. The recommended level is $1,503,180, 1.5 times total debt per year plus 25% of annual expenditures. In order to meet this shortfall, the recommendation is to increase rates between 3% and 9% to break even and fund the required balance.

“The study recommended an option to increase sewer rates by 5% for the next five years, but we recommend an increase to 4% as it is still within the safe range and less than a 5%,” Pedroza said.

The proposed increase would be 4% for each of the next five years for a total cost increase to the average customer of $5.41 by the fifth year, beginning with a $1 increase that first year in sewer fees and a total cost of $8.36 counting water and sewer combined.

“The city has not increased water and sewer rates since 2012,” Pedroza reported. “The cost to maintain our systems has increased and the demand continues to grow. Clean water is also getting costlier and harder to obtain.

“Our rates have been one of the lowest if not the lowest in the state. While we like to keep our rates stable, we must continue to manage our utility system in a financially responsible fashion while impacting our customers as little as possible. Staff is recommending a slight deviation of the recommendation from the 65th North Group, which is to increase more on the consumption of water instead of the base water fee that provides a lesser increase to the low consumers of water in the city.”

Pedroza noted the city has three wells and the cost to maintain those wells is increasing.

“We need to either dig three new wells or deepen the existing wells in order to meet the demand,” he said. “Our water table has suffered, which means we need to either dig deeper or dig elsewhere. That is an obvious financial cost to the city. It will cost roughly $1.6 million to deepen.”

Pedroza stated the current bill the city of Douglas issues contains changes for water, sewer and sanitation.

“With very little consumption a typical utility bill here is between $60 and $65,” he said. “That includes a $20 garbage pickup fee and then you add a $25 sewer fee and your $15.50 water fee which is all put into one bill.”

Huish said he felt it was important to table this issue until the October meeting so that each constituent in Douglas can see how their council representative votes on this particular issue.