Cave Creek advisory board backs lowering top water tier, urges limits on resource-fee burden

The Cave Creek Utility Advisory Board on a preview of proposed rate changes recommended lowering the top volumetric water tier from 50,000 to 40,000 gallons and asked staff to provide clearer total-bill figures that include a proposed water‑resource fee.

Sherry (Speaker 2), who presented the updated rate models, told the committee the Oct. 15 direction from Council was to lower the top tier to 40,000 gallons and to examine seasonal rates. “The top tier was the highest price was anything 50,000 gallons or more, and they wanted to have that threshold lowered to 40,000 gallons,” she said. She outlined two revenue scenarios: a more gradual option with 6% annual revenue increases (option A) and a faster one with 10% increases (option B). Both scenarios were modeled with and without a separate water‑resource fee meant to pay for new water supplies.

The staff presentation showed a third option for the resource fee: either a volumetric charge of $3.27 per 1,000 gallons or a set of fixed tiers that allocate the same total revenue. Sherry said the resource fee models were intended to recover roughly $1.14 million annually in debt service tied to planned water acquisitions and that staff will refine how much of that burden should fall to existing customers versus new connections.

Advisory‑board members pressed for clearer, single‑line totals showing how much an average customer’s bill would change once the resource fee is added. “It’s a little deceiving if you just glance at the page and not really take time,” Speaker 7 said, adding that with the full resource fee included the average customer’s bill could climb far more than the 6% rate increases shown on the tables. The committee asked staff to add a direct comparison of current bills versus the various proposed packages so Council and the public can see the combined effect.

The committee debated equity across customer classes. Staff explained that booster‑site and “boosted” meter charges are cost‑based and that Cave Creek has several small, high‑cost booster sites while Desert Hills has fewer boosters serving many customers; that difference helps explain why boosted accounts and Desert Hills customers face different base‑charge impacts. Members asked staff to evaluate whether larger commercial accounts using more than 40,000 gallons should face rates aligned with residential over‑40,000 usage.

On policy recommendations, the board recorded three clear positions to carry to Council: endorse lowering the top volumetric tier to 40,000 gallons; ask staff to present total bill impacts that include any water‑resource fee; and recommend that no more than 50% of the water‑resource fee’s debt service be charged to existing customers, with the remainder pursued through capacity fees or other sources tied to new connections. The board also urged robust customer outreach before any changes take effect.

Sherry said the billing software in use is limited and staff would prefer to phase in complex seasonal or tiered structures only once a new utility‑billing system is in place; she nonetheless will present the options to Council on Nov. 4. The committee agreed to finalize brief bullet points for the Council presentation and tentatively scheduled itself to reconvene on Dec. 10 for follow‑up if needed.

The Advisory Board’s comments will be provided to Council ahead of the Nov. 4 presentation, and Council must decide whether to issue a notice of intent and set public hearings before rates or a resource fee can be adopted and take effect.