The Oro Valley Water Utility Commission voted Jan. 13 to recommend that the mayor and town council consider a proposed water‑rate package for fiscal 2025–26, including a 5% increase to potable base charges and commodity increases focused in lower tiers.

The recommendation follows a multi‑hour presentation by utility staff explaining the assumptions and outputs of a five‑year rate model. Peter (water utility staff) and Mary (finance staff) presented the model inputs — personnel, power and CAP delivery costs, projected growth and capital spending — and the model output that the staff said supports a 3.6% rate increase proposed for the next fiscal year and smaller projected increases thereafter.

Why it matters: staff told commissioners that the utility is funded by an enterprise fund and must meet cash‑reserve and debt‑coverage requirements. The model aims to preserve required reserves while increasing annual cash funding for existing system improvements and maintaining the utility’s ability to meet future capital needs without overreliance on borrowing.

Key parts of the proposal presented to the commission:
- A potable base‑rate increase of 5% across meter sizes (example: a typical 5/8‑inch residential customer would see the potable portion of their bill move from about $49.64 to about $51.45 under the proposed plan).
- Commodity (volumetric) increases of roughly 3.5% in tiers 1 and 2; no change to tiers 3 and 4 in this proposal.
- No change proposed to reclaimed‑water rates or to the groundwater preservation fee (GPF) in this package.
- Staff said the model assumes 3% annual inflation for personnel and operating costs and uses municipal assumptions supplied by the town finance office.

Staff also described next steps and schedule. If the commission’s recommendation moves forward, staff will ask council to publish a notice of intent on March 5 and to set a public hearing for June 4; adopted rates would take effect 30 days after adoption (staff cited July 5 as the likely effective date if council approves the change).

Votes at a glance (formal actions taken during the meeting):
- Approval of Nov. 18, 2024 minutes: motion approved; the meeting recorded one abstention (a commissioner who said on the record they had not attended that prior meeting). (Provenance: meeting minutes approval discussion, Jan. 13.)
- Election of commission chair: Narayan Veseo was nominated and elected to serve as chair effective Jan. 14, 2025. (Provenance: nomination and vote recorded on Jan. 13.)
- Election of commission vice chair: Tom Merrick was nominated and elected vice chair effective Jan. 14, 2025. (Provenance: nomination and vote recorded on Jan. 13.)
- Recommendation to town council on water rates: motion to forward the water‑rate proposal to mayor and council for consideration passed. (Motion language recorded as: “Recommend to forward the water rates as presented to the mayor and council for their consideration for approval.”)

What commissioners emphasized: commissioners repeatedly asked staff for conservative assumptions and for evidence that previous commodity increases were shifting customers into lower tiers. Several commissioners said they preferred to wait for a fuller year of post‑change data before recommending further changes to tiers 3 and 4; staff said they want at least a year of data to measure behavioral effects before adjusting those tiers again.

Next steps: Staff will present the notice of intent to town council on March 5 (if approved by council staff will publish required public‑hearing notices) and return to the commission and council with the formal hearing presentation in June. The commission’s motion to forward the recommendation was carried at the Jan. 13 meeting.