Important Updates on the City of Flagstaff's 2024 Water & Sewer Fee Hikes

In the May 2024 issue of the Chamber’s @7000 feet magazine we shared our concerns about the city’s water, sewer and reclaimed water rate hikes being proposed to Flagstaff’s Mayor & Council. We also shared our ongoing advocacy work on this issue that included one-on-one meetings with the City’s Water Services Director, Mr. Shannon Jones, our Flagstaff Mayor Becky Daggett and individual city council members which occurred throughout the first six months of 2024.

We have an amazing update to share on this important issue.

In early June, Chamber staff met with the Flagstaff Mayor, Councilmember Miranda Sweet and Councilmember Lori Matthews, alongside local business leaders and the City Manager, Greg Clifton and Mr. Jones at City Hall. Several local business leaders voiced concern over high and increasing wage mandates, high input costs and now the proposed high city fee hikes. Business leaders suggested the piling on of higher fees was “death by a thousand cuts.”

You will recall the initial proposal headed for approval at June and July city council meetings included raising both water and sewer line items on your City water bill by 15% per year for 5 consecutive years beginning September 1, 2024, and then 5% in subsequent years in perpetuity. The Chamber had asked that the city consider a lower fee hike and expanding their usage of debt within the utility against utility revenues to lessen the impact on ratepayers.

In addition to the rate hikes, the rate restructure plan proposed for adoption by Mayor and Council included new capacity fee hikes, or higher fees on new water hook-ups. Under consideration were rates that take new residential water meters for new housing from $5,728 to $21,603 and new commercial water meters from $30,530 to over $115,000. We argued the newly inflated costs for new residential and commercial meters in the city will be passed on to consumers in higher housing and higher product service costs at point of sale.

The group meeting in early June between Chamber staff, business leaders and city staff and elected officials proved to be very productive. City staff revised their proposed fee schedule significantly reducing the water and sewer fee increases to 10% per year for the first 5 years of the new rate model, and lowered capacity fees. The result of Chamber advocacy work on this issue will save business owners and residents thousands of dollars each year in coming years.

Additionally, the City Manager and City Water Services Director have vowed, at the Chamber’s urging, to be more accountable on city water and sewer capital improvement projects with more reporting on the ongoing city work. The city sought to raise over $300 million in new capital revenue with the rate increase.

While rate hikes and property tax increases from local municipalities add to inflation and increase costs for local residents and visitors, the Chamber recognizes that the city’s water infrastructure is a critical component of economic stability and growth.