Council Workshop

CITY OF BUCKEYE COUNCIL WORKSHOP JANUARY 20, 2026 MINUTES City Hall - 1st Floor / Executive Conference Room 530 East Monroe Avenue Buckeye, AZ 85326 4:30 p.m. 1. Call to Order/Roll Call Mayor Orsborn called the meeting to order at 4:30 p.m. Members Present: Councilmember Berry, Councilmember Beard, Councilmember Heustis, Vice Mayor Goodman (via Microsoft Teams), and Mayor Orsborn. Members Absent: Councilmember Youngker and Councilmember HagEstad. Departments Present: City Manager Doug Sandstrom, Deputy City Manager Javier Setovich, Deputy City Manager Dave Roderique, Deputy City Manager Jared Askelson, Interim City Attorney Tosca Henry, City Clerk Lucinda Aja, Chief Human Resources Officer Cindy Camarata, Water Resources Director Terry Lowe, Community Services Director Miranda Gomez, and Interim Communications Director John O’Halloran. 2. Workshop Items 2.A Council to receive a summary of the 2025 Water and Wastewater Rate Study and Recommendations. Staff Liaison: Terry Lowe, Water Resources Director Mr. Lowe presented information regarding the 2025 Water and Wastewater Rate Study (the Study), explaining the process and findings. He highlighted the formation of the 2025 Citizen Water and Wastewater Rates Committee in July, which conducted several meetings to analyze each utility component. The study compared Buckeye's utilities with those of similar and larger cities, revealing that Buckeye has more assets, such as wells and booster pumps, driving higher costs. The Committee recommended a rate cycle restructure and associated fees, which were approved on October 9, 2025. Public outreach efforts included social media campaigns, community meetings, and discussions with Homeowners Associations. The proposed timeline includes presenting the plan to the Council on February 3, 2026, starting a sixty-day public comment period, adopting the rates in early April, and implementing them in May. The study emphasized the need for a strong water portfolio and asset management program, targeting a one percent reinvestment rate initially, with a goal of reaching two percent in the future. The financial policies require a study every five years, fee adjustments based on a five-year model, and maintaining reserve funds and debt coverage ratios. The proposed rate increases are 4.25 percent annually for water and 7 percent for wastewater over the next four years. The new rate structures aim to incentivize conservation and ensure fairness to customers, with adjustments to base rates and usage tiers for residential, commercial, and landscape customers. Mr. Askelson discussed the financial aspects of the Study, emphasizing the importance of covering operating costs, maintaining reserves, and meeting debt coverage ratios. He explained that the Study was completed last spring, but additional outreach and the formation of the Committee delayed its presentation. The rate adjustments are based on a five-year model, with a focus on January 20, 2026 Council Workshop Minutes recovering operating costs, including maintenance and repair budgets. The Study projects a decline in operating surpluses and fund balances due to increased debt issuance in 2028, prompting a recommendation for a four-year rate plan instead of five years. The proposed rate increases are 4.25 percent annually for water and 7 percent for wastewater, with a focus on gradualism to avoid rate shocks. The new rate structures aim to incentivize conservation and ensure fairness to customers, with adjustments to base rates and usage tiers. Mr. Askelson also highlighted the impact of the global connection fee, and the need to aggressively collect these fees going forward. Based on questions asked by Mayor Orsborn, Mr. Askelson explained that without the fund balance, the City would need to either borrow more or increase rates more aggressively. The fund balance acts as a shock absorber, allowing for more gradual rate changes and providing time to plan for unexpected expenses; explained that the four-year plan was recommended due to the projected decline in operating surpluses and fund balances, as well as the need to reassess the situation after the debt issuance in 2028; and responded that Buckeye's higher rates are due to its larger service area, more assets, and the need for a strong water portfolio. Councilmember Heustis asked about the percentage increase for a commercial customer with a 2-inch meter using 20,000 gallons. Mr. Askelson answered, stating that the increase would be 0.7 percent, resulting in a $4.64 monthly increase. James Subjack, who served as Chair for the 2025 Water and Wastewater Rate Committee, expressed gratitude to the Council and Mayor for their foresight in establishing a structured approach to water and wastewater rates. He emphasized the importance of proactive planning. He highlighted the significant cost increases in chemicals, electricity, and personnel, which have been absorbed by the fund balance. He stressed the need to maintain a healthy fund balance while treating citizens fairly. Mr. Subjack praised the Water Wastewater Department for their thorough explanations and responsiveness to the Committee's questions and concerns and concluded by endorsing the proposed rate plan as the most prudent fiscal decision for the City, ensuring the delivery of quality water and efficient service. Based on questions from Vice Mayor Goodman, Mr. Askelson explained the use of capital funders versus Operating and Maintenance (O&M) fund for replacements are driven by the available operating revenue, and the decision is based on whether there are sufficient operating funds to cover the expenses; clarified that the City is not in arrears with regard to Global connection fees, but has encountered situations where prior agreements prevented fee collection; provided information on the recent rate studies of Avondale, Surprise, and Goodyear, noting that Avondale is in the middle of a three-year plan, Surprise adopted theirs in the summer, and Goodyear adopted theirs in December; explained the rationale behind the change from a steady base rate to a consumption base rate was to drive conservation and ensure customer fairness by consolidating the meter tables and aligning the base rates. 3. Adjournment. There being no further business to discuss, Mayor Orsborn adjourned the meeting at 5:39 p.m. ______________________________________ Eric W. Orsborn, Mayor ATTEST: _____________________________________ Lucinda J. Aja, City Clerk I hereby certify that the foregoing minutes are a true and correct copy of the Council Workshop held on January 20, 2026. I further certify that a quorum was present. _____________________________________ Lucinda J. Aja, City Clerk January 20, 2026 Council Workshop Minutes