Queen Creek proposes 15% water rate increase

Queen Creek is proposing a 15% increase in water rates to offset the costs of providing water to the rapidly growing city.

Queen Creek has not instituted a water rate hike since 2010.

The proposed rate increase would come out to between $3 and $6 per month for most residential customers. For 95% of residential customers, the monthly increase would be $15 or less.

If approved, the new rates will be effective on June 6 at the earliest, and will be reflected in residents’ water bills beginning with the July 29 billing cycle. Sewer rates would not be affected by the increase.

The proposed rate hike was introduced to the Queen Creek Town Council during its Feb. 19 meeting by Scott McCarty, the deputy town manager and chief financial officer.

During the past 10 years, the town’s water utility has grown to a service area of about 70 square miles — larger than the town’s boundary — and has 40,000 accounts.

The tremendous growth in the town’s population during the past decade has resulted in the town acquiring other water companies. At the same time, the cost of constructing infrastructure, as well as the purchase of water and groundwater extinguishment credits, has risen, causing the gap between revenue and capital expenses to widen.

“The revenue amount received from monthly billings is about $30 million annually,” a staff report stated. “To cover expenses, additional revenues are needed. One way to increase revenue is to increase the existing monthly rates.”

Six council members who attended the meeting said the increase, although not desirable, was needed. Council Member Travis Padilla was absent from the meeting.

“We always talk about being fair, and gosh, we would love to be able to put prices down rather than up,” Council Member Robin Benning said. “But the reality is for our residents there’s a structural deficit and we need to figure out ways to reduce that deficit to the greatest extent possible, and unfortunately, if that means raising rates — there’s no magic pill, we have to do that.”

The increase would be an interim step until more comprehensive rate and capacity fee studies can be put in place. Capacity fees are the one-time fees paid by new development to recover growth infrastructure.

“There’s a lot involved from the acquisition of water to replenishment to all of the infrastructure we build,” Mayor Julia Wheatley said. “I know this council and the previous councils have prided ourselves on the fact that we are fiscally responsible.”

Property taxes in the town have remained frozen since the council approved a five-year freeze in 2022. The town calculates the freeze, other tax cuts and eliminations, and debt payoffs and refinancing have resulted in more than $157 million in savings. Last year, the council eliminated the 0.25% Town Center sales tax and millions of dollars in debt has been retired.

“It’s our responsibility as a council to ensure that we have a quality water system that is built and maintained not only for our current residents but future residents, as well,” Wheatley said.

The town is also weighing future water policy changes, including becoming a designated water provider and possibly charging water-only customers living outside of the town higher monthly rates than combined water and wastewater customers within the town.

“We recognize that the cost of providing water is higher to customers outside of our town boundaries because we’re not able to recapture that wastewater,” Wheatley said. “I’m supportive of … ensuring that the fair share is paid throughout, and our town residents are not subsidizing residents outside of our town boundaries.”

On March 5, the council is expected to adopt a notice of intention to raise the water rates. A public hearing on the issue will be held during the council’s May 7 meeting.

For information on the proposed hike, as well as a calculator to help residents estimate their new water rates, residents are asked to visit https://bit.ly/41qV25d.

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