Water commission endorses guidance recommending cost‑based reclaimed water pricing; refers final decision to City Council

The Flagstaff Water Commission voted to endorse a draft guidance document that recommends city council consider switching reclaimed water pricing from the current percentage‑of‑potable approach to a cost‑of‑service basis when the next utility rate study is completed.

The commission’s work group — composed of commissioners, utility staff and users including golf course representatives and Northern Arizona University participants — spent months reviewing reclaimed water uses and rate options. Water Resources Manager Erin Young briefed the commission, explaining reclaimed water status and policy context: the city’s reclaimed program has historically priced reclaimed water as a percentage of potable rates (commonly about 35%), the city established a separate reclaimed water fund and Council adopted a 5‑year potable rate schedule effective Sept. 1, 2024 (potable increases of 8.5% per year for five years were adopted). Young said reclaimed water’s annual delivered volume is roughly 2,000 acre‑feet and annual discharge about 4,000 acre‑feet that could be repurposed for recharge or reuse.

Work‑group recommendation and commission action: the guidance document, prepared by the work group, recommends moving to “cost‑based reclaimed water pricing to replace the present 35% of potable pricing approach.” Commissioners debated whether the council should adopt policy changes now or defer them until the next formal rate study; staff advised Council will decide the policy and that any change could be implemented as part of the next rate study (staff noted that the current study schedule targets the next rate analysis in roughly a year). The commission made a formal motion to endorse the draft guidance document; the motion passed with no recorded opposition.

Public comment: former commissioner and resident Ward Davis urged the commission to consider the fairness question — how much of wastewater treatment plant costs reclaimed users should cover — and warned that a true cost‑of‑service allocation will likely raise reclaimed rates. Nicole Elman, representing Aspen Valley Golf Club, said the golf course supports a cost‑based study and needs a defensible, predictable price to finance its reclaimed‑line infrastructure.

Operational and budget context: staff provided a high‑level reclaimed fund picture: reclaimed revenues in recent years are on the order of about $1,000,000 annually (sample budget numbers in the presentation showed $600,000 in operations and $200,000 available for capital as an illustrative split). The work group recommended the commission emphasize transparency — including a short executive summary listing goals and allocation choices — when forwarding the guidance to City Council. Commissioners requested that staff supply a detailed spreadsheet showing historical reclaimed fund revenues and expenditures before the council discussion.

Ending: the commission endorsed the guidance document and asked staff to refine the presentation and executive summary for City Council, to provide granular reclaimed‑fund fiscal data, and to make clear that Council retains the decision on whether and when to change reclaimed rate policy.