Gilbert outlines water cost pressures, North Water Treatment Plant milestones and planned rate steps
Loading...
Summary
Water manager Rebecca Hamill told council that CAP costs and treatment needs have driven higher operating costs, deferred pipeline projects total about $151 million, and a multi‑year rate plan (50%/25%/25%) remains under consideration with outreach to follow.
At an Aug. 26 study session, Rebecca Hamill, Gilbert’s water manager, briefed the Town Council on water revenue, consumption patterns and major water projects, and laid out the town’s planned rate process and public outreach.
Hamill said rising water‑resource costs, supply uncertainty on the Colorado River and higher treatment and energy costs have increased pressure on Gilbert’s Water Fund. Since 2020 the town has seen a roughly 73 percent increase in the per‑acre‑foot cost of CAP (Central Arizona Project) water, and staff cited about $600,000 of increased chemical and electrical costs this fiscal year.
Why it matters: Gilbert’s water utility is an enterprise fund required by town policy to be self‑supporting. The town faces both near‑term operating cost increases and long‑term capital needs — most notably reconstruction of the North Water Treatment Plant and a well program — and staff said continued rate increases are necessary to fund operations, capital projects and repair‑and‑replacement obligations.
Key financial and project details - Rate history and near‑term plan: Council adopted a “cash bond gradual” approach in February 2024. The schedule produced a 50 percent water rate increase effective April 2024, a 25 percent increase in April 2025 and staff is evaluating a proposed 25 percent increase for April 2026 as part of the ongoing rate study. - North Water Treatment Plant: Hamill said the reconstruction is roughly 50 percent complete, will supply an estimated 70 percent of Gilbert’s water when fully online, is sized for about 60 million gallons per day and is expected to serve roughly 250,000 residents. Staff reported fewer than 300 days until startup of the new treatment complex and fewer than 500 days before primary treatment transitions to the new facility. - Deferred projects and costs: The town identified about $151 million of pipeline replacements and system connectivity projects deferred outside the current five‑year plan to balance the budget after discovering that four of seven new well sites will need on‑site treatment or blending infrastructure. - Repair and replacement fund: The adopted multi‑year option increases contributions to the repair and replacement fund, giving the fund capacity to begin addressing deferred backlog over coming years (staff cited $66 million capacity in the repair and replacement fund beginning FY 2029 under the current plan).
Consumption and affordability Hamill described residential water patterns: 57 percent of residential accounts use 8,000 gallons per month or less (about 23 percent of residential consumption). A small share of users consume disproportionately large volumes: staff noted that roughly 1 percent of residential accounts use more than 50,000 gallons per month and account for about 11 percent of residential supply.
On affordability, Hamill cited an ASU Kyle Center report showing Gilbert’s household burden at about 0.87 percent of income for the twentieth percentile, below the state and national averages. Hamill also described Gilbert’s utility bill assistance program for households up to 120 percent of area median income; that program provides a $30 monthly bill credit, and staff said 408 clients have been enrolled with about $32,000 issued to date.
Council questions and operational items Council members raised concerns about widely varying bills within ZIP codes, high HOA water expenditures and the cost and logistics of switching neighborhoods to reclaimed water. Staff responded that reclaimed water conversions require significant neighborhood infrastructure and storage (pump stations and distribution) and can have 15–20 year payback timelines; staff encouraged customers to use available conservation programs, leak checks and smart irrigation rebates.
Next steps Hamill outlined the rate‑setting timeline: staff will complete the rate study, brief HOAs, hold public open houses and return to council with final recommendations in early 2026 for rates to take effect April 2026 if adopted. Council did not take a new formal vote at this meeting.
Ending Town staff emphasized outreach and conservation programs, and said they will continue pursuing the treatment plant schedule while working through the rate‑study and public engagement process.
