City faces soaring costs as wastewater projects stall

In a recent government meeting, officials discussed the significant financial challenges facing the city's wastewater and water utility projects, primarily driven by rising construction costs and inflation. The meeting highlighted that while the number of projects remains unchanged, the costs associated with them have surged dramatically, with estimates for fiscal year 2024-2025 rising from $15 million to $33 million.

Officials presented a detailed forecast indicating that the city's debt service is expected to exceed $51 million by fiscal year 2028-2029, largely due to increased project costs. To mitigate the financial impact on existing customers, a new fee structure is being proposed to fund growth-related projects without burdening current ratepayers.

The discussion also touched on the regional wastewater treatment partnership with Phoenix, which processes approximately 50% of Mesa's wastewater. This collaboration is deemed essential for cost efficiency and infrastructure management, as building a separate facility would be prohibitively expensive.

In terms of water utility operations, officials reported an increase in operational costs by about $2.8 million, attributed to rising raw water and chemical prices. The city is facing unique challenges with three major projects that are all experiencing peak costs simultaneously, prompting a reevaluation of other life cycle programs and potential downsizing of certain initiatives.

The meeting concluded with a proposal for rate adjustments, including a 7.5% increase for residential customers and an 8.5% increase for commercial customers, translating to an additional $1.96 and $4.45 on monthly bills, respectively. Officials emphasized the importance of these adjustments to maintain financial stability and support ongoing infrastructure improvements, which are critical for the city's future growth and sustainability.