Tucson Water Overview

Fiscal Year 2022/23

Mission Statement

To ensure customers receive high quality water and excellent service in a safe, reliable, efficient, and environmentally responsible manner with reasonable, fair and affordable water rates for citizens. Provide the necessary resources to balance the need to maintain Tucson Water's critical infrastructure with the established rates. Above all, to continue to provide excellent customer service, professional development, and continuous process improvement.

Programs

The following programs are included in this department:

Director's Office

Business and Organizational Support Services

Customer Service

Debt Repayments

Planning and Engineering

Source Water


Water Maintenance

Water Quality and Operations

Other Budgetary Requirements

Green Stormwater Infrastructure

Covid-19 Disaster Relief


Staffing By Program


*Full Time Equivalent Employee (FTE)

Budget By Program



Department Expenses

Budget By Expense Category

Budget By Funding Source

Significant Changes

The adopted budget for Fiscal Year 2022/23 of $312,123,280 reflects a net increase of $16,398,600 from the Fiscal Year 2021/22 Adopted Budget. Major changes include the following:


• Increase in capital expenses by $9,350,000 to fund WIFA BIL eligible projects to remediate PFAS

• Increase in CAP Water expenses by $8,651,460 due to a Tier 1 water shortage declaration resulting in increased fees

• Increase in personnel expenses by $3,962,340 due to market rate pay adjustments

• Increase in Power (Electricity/Gas) expenses by $1,049,440 due to inflation

• Decrease in chemical budgeted expenses by $379,000

• Decrease in legal budgeted expenses by $680,000

• Decrease in miscellaneous professional services expenses by $1,036,190

• Decrease in consultant and survey expenses by $1,413,070

• Decrease in low-income program budgeted expenses by $1,430,000 because this is processed as an offset to revenue

• Decrease in in-lieu of property tax budgeted expense by $2,000,000 because this is processed as an offset to revenue

Trends

Water sales are based on the most recent 5-year trends and forecast of development-related revenues (System Equity Fee, CAP Water Resource Fee, and connection fees) consistent with current-year estimates. The Fiscal Year 2022/23 forecast for development-related revenues is relatively flat with revenue levels like those in the prior plan.

Under the existing rates, water sales revenue is forecasted to gradually increase based on projected account growth that is partially offset by an expectation of gradual decreases in per account consumption based on the recent drought declarations and resulting conservation measures. Customer account growth in Fiscal Year 2022/23 is expected to increase by about 0.06% as compared to Fiscal Year 2021/22 reflecting an approximate increase of 730 customers annually. This forecast reflects a slowing of growth relative to the last 5 years. Aggregate annual potable sales volumes are projected to increase slightly over the next 5 years at an average rate of 0.27%.

Central Arizona Project (CAP) rates are expected to significantly increase because of the unprecedented drought currently experienced in the Colorado River basin. A Tier 1 declaration was made for 2022 and Tier 2 drought stage is projected to be announced for the 2023 calendar. Although, the City of Tucson is well positioned with regards to water supply, its CAP allotment is at risk of being reduced because of failing conditions on the Colorado River. Tucson Water is also engaged with state and federal agencies on discussions about the drought conditions in the Colorado River basin and potential impact to its water supply.


Accomplishments

Tucson Water is recognized as an industry leader in conservation, water resources management, and innovation. The City of Tucson and Tucson Water are committed to protecting the public and has an excellent track record addressing emerging contaminants and are actively working with state and deferral agencies to develop and use the most effective treatment processes to address PFAS.
The Santa Cruz Heritage Irvington Outfall started discharging TARP treated water into the Santa Cruz River in November 2021. Construction is also underway to be able to discharge TARP water into the utility’s recycled water system.
Tucson Water expanded its customer assistance program by adding an emergency/special hardship fund to support residential customers who are experiencing a financial hardship due to job loss, serious illness, or family loss. The Low-Income Assistance Programs application process was streamlined to add automatic qualifiers for eligibility and allows self-certification of total household individuals.

Future Objectives

Tucson Water is diligently working on the following utility’s major initiatives for 2023.

•Water Maintenance has revamped its valve exercising and fire hydrant flushing program to locate, exercise and GPS around 98,000 valves distribution system; perform preventative maintenance on 21,673 fire hydrants; and uni-directional flush 4,500 miles of water mains. The goal is to complete the entire system by 2027.

•Continue to develop the One Water 2100 Master Plan

•Continue to protect public health from water quality threats such as PFAS

•Undergoing digital transformation to better support decision-making and drive cost efficiencies that help deliver sustainability

•Redevelop Water Loss Control Program to monitor and reduce lost and unaccounted for water

•Evaluate the Green Stormwater Infrastructure Program

•Concentrate on enhancing training and career opportunities for staff