On January 8 the Patagonia Town Council approved a motion to seek an increase in water and sewer rates for current customers. Water and sewer fees would increase by 80% over the next six years if the Council approves the measure. The base monthly rate for water would be set at $34.41 in 2030, and sewer will be $60.24 in 2030.
The Council’s motion was the first step in the process required to raise customer rates to meet the current costs of operations. A public hearing on the rate increases is scheduled for March 12 at 6pm in the Town Council Chambers. The Council will vote on the rate increases directly after the hearing. If approved, the new rates will take effect 30 days later. For this year, residents would see a 17% increase in both water and sewer fees.
In November, 2024, Karl Pennock, a Rural Development Specialist with the Rural Community Assistance Corporation, presented a financial analysis of the Town’s Water and Wastewater department to the Council. Pennock concluded that the operating costs of the Town’s water and sewage processes are not being met by the income from ratepayers, leaving the Town having to make up the shortfall of $100,000-150,000 per year for both water and sewage systems.
The Town last increased water and sewer rates in 2016. Since that time, the annual costs to maintain and repair the water and sewer infrastructure have increased significantly. The Town’s Enterprise Fund, used to pay ongoing costs of water and sewer services, has been in the red for the past three years. Ron Robinson, Patagonia’s Town Manager, says an increase in rates is overdue and will re-balance the fund, so that income from rates fully covers the expenses to operate water and sewer services.
Current rates for water include a base charge of $19.05 per month that includes 2,000 gallons of use. Additional charges are made for usage above 2,000 gallons per month. The average usage in Patagonia is 6,000 gallons per household hook up, which currently costs $25.45 per month. There is a 25% discount for low-income households. (‘Low income’ is defined as a household with an income of 80% or less of the median income of the area, or approximately $41,000.)
There is also an availability fee for households that are not occupied year-round; owners pay 50% of the base rate when the house is unoccupied.
Patagonia’s fee of $25.45 for 6,000 gallons per month is significantly lower than the state-wide average of $42.85 for the same usage.
The current rate for sewer is a base charge of $33.35 per month. The Town offers the same discount of 25% for low-income households and the same availability fee of 50% for households not occupied year-round.
Inflation over the past six years has increased costs beyond what current rates cover. Robinson notes that this is true even though the Town’s compensation for its water and sewer employees falls below statewide averages. At the end of 2024, the Town’s Enterprise Fund, which holds revenues from water and sewer fees, was $56,200 short of covering costs.
As required by the State, Robinson completed a rate study to determine what rates were necessary to support current and projected costs to operate Patagonia’s water and sewer systems over the next six years.
The proposal spreads the rate increase over a six-year period and will assure there is sufficient revenue from rates to cover costs of operations and build reserves for infrastructure emergencies. Expenses include three full-time employees who handle basic maintenance and repair and regularly- scheduled monitoring of the water and sewer systems, plus materials and equipment, as well as maintaining an emergency reserve fund. There is currently $441,161 in the reserve account. Robinson says that is not sufficient given today’s costs and the age of the systems.
Rates paid by users do not cover major capital improvements. The Town secures grants to cover planned infrastructure upgrades. For example, this year on Rothrock Avenue, 1,500 feet of 4-inch water pipe will be replaced with 6-inch pipe, an upgrade being paid for by a $654,616 Community Development block grant from the Arizona Dept. of Housing. The new pipes will replace those installed in 1965. Other upgrades will depend on the availability of grants.
Council member Francesca Claverie is in favor of the increased fees. “I think this is really important,” she said. “Inflation has gone up, and we have a very small budget. We’re just losing money. This isn’t an evil money grab. We don’t get property taxes. We depend on sales tax and service taxes.”
Asked if the measure to increase the water and sewer rates will pass, Robinson said, “We haven’t raised rates in over eight years with over 28.9% inflation in that same time period. We’ve upgraded our wastewater treatment plant and our reservoirs, and we have installed new water service lines. A little over $1.4 million has been spent with 80% of that coming from grants. I think it will pass.”
Here is the information packet supplied by the Town of Patagonia regarding the intent to raise rates:
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