Francom outlines need for smaller, more frequent water rate increases
By Curtis Riggs | April 8, 2009
CAREFREE – Carefree Water Company General Manager Stan Francom told the Carefree Town Council about the need for smaller, more frequent water rate increases at Tuesday’s Water Company Board of Directors meeting.
“During past budget consideration meetings our stated goals were to not go long periods between rate increases so rate increases would not be so large,” Francom told the board.
Francom then told the board of budget issues, which will significantly affect the water company budget this fiscal year.
He informed them about a 5.5 percent increase in water rates by Scottsdale, which went into effect in November of 2008. Scottsdale water rates affect the cost of water in Carefree because Carefree’s Central Arizona Project (CAP) water is delivered through the Scottsdale water system.
Francom did, however, point out that 300 acre-feet of CAP will be delivered by the Cave Creek Water Company this year, as is called for in a contract between the two Desert Foothills communities. Carefree has not been able to receive CAP water from Cave Creek the past couple years while Cave Creek dealt with its own water issues. Carefree officials prefer receiving the CAP water from Cave Creek because the CAP delivery charge is less. Francom explained Carefree would take more water from Cave Creek in winter months because Cave Creek has obligations to deliver its water elsewhere in the summer.
“Taking water from Cave Creek is a positive thing as far as costs are concerned,” he said.
The Scottsdale rate increases are expected to increase Carefree Water Company expenses by $10,000 this fiscal year.
He also told the board about a 28 percent increase in groundwater pumping charges from APS, which went into effect in January. The cost for electrical pumping is expected to increase by 8 percent in early 2010, by about $11,000.
He also said the Central Arizona Project is increasing its maintenance charges by $10 an acre-foot in January 2010.
Increases in employee health insurance costs are expected to go up by 12 percent this year, to nearly $15,000.
Total increases in expenses for the current fiscal year for the water company are expected to be $45,000.