The city operates several businesses that are supposed to pay their own way – in other words, they are not supported by tax money. These businesses charge a fee for services. They are Water, Sewer and Trash.
Even though the city has a monopoly for its water and sewer business, it cannot charge whatever it wants. State law requires a city to justify its rates with specific data as to the cost of operation. That data has to be made public and the City Council has to hold a public hearing on the rates and any proposed increases. The Council makes the final decision – wary of the political ramifications.
The water/sewer department is not in business to make a profit to support other city departments. (It does pay its share of administration.) Likewise, the water/sewer department should be fully supported by its fees and not subsidized by general tax revenues.
The Arizona Corporation Commission has no jurisdiction over city-owned utilities.
Now, trash is a little different. The city has some competition there. The state allows a city to have a monopoly on residential trash but any private trash company can compete with the city for trash removal from businesses. Right now, there is a state bill pending that would also make multi-family trash open to competition.
So, the city solid waste department has to: (1) Cover its expenses from its fees; (2) Not make a profit; (3) Compete with private companies for the business trash accounts.
And then there is the recycling. The recycling plant is owned and operated by Norton Environmental Services. We take the recycling trash to them and they take it from there. Norton gets the proceeds from the sale of any materials. And, we subsidize Norton with about $260,000 per year. Those funds are part of the expense of the solid waste department. FBN
By Jerry Nabours
Any opinions in this column are those of Jerry Nabours and not necessarily the view of the City Council.
