Taxes, Add-On Fees, and an Inverted Rate Schedule Make Oro Valley Water Expensive

Taxes, add-on fees and an inverted rate schedule make Oro Valley water expensive
Oro Valley residents have successfully managed water use. One reason is that water is expensive in Oro Valley. To the consumer, saving water means saving money.

Water is expensive because Oro Valley water cost is based on an inverted water rate schedule. To that, the town adds taxes and fees. The result: Water cost approaching $6 per thousand gallons.

Here's how it works.

Oro Valley's inverted water rate schedule penalizes water use by increasing cost as more water is used

Oro Valley uses an inverted water rate schedule. Each added step in water use is more costly per thousand gallons than the last. This is also called an inverse, or "progressive" rate schedule.  

An inverted water rate schedule is used by many communities as a way to reduce water use by providing the financial incentive to use less water.

The benefit to the town is that an inverted water rate schedule likely increases total revenues because there are some who simply do not conserve water.

Five taxes and add-on fees add 41% to the water cost
20 years ago, Oro Valley water cost included two taxes: A sales tax and a superfund tax. Since that time:

• 2003: In October, the town instituted a groundwater preservation fee of 21 cents per thousand gallons used. This fee increased every year until it got to 95 cents per thousand.
• 2007: In May, the town added a utility tax of 2%. At that time they chose not to show the tax separately on the bill. They included it with "sales tax."
• 2008: In February, the town instituted at stormwater fee of $2.90 per month.
• 2011: The town added another 2% to the utility tax. It is a 4% tax.

The result is today's fee and taxation level:

• $4.50 Stormwater Fee
• 8.5% Sales Tax
• 90 cents per thousand gallons Groundwater Preservation Fee
• .17% Superfund tax 
• 4% Oro Valley Utility Tax

Water taxes and fees have grown substantially
Over the years, the taxes on water and the fees added to the water bill have grown from 5% of the cost of water in 1998 to 41% of the cost of water today.

Today, an Oro Valley resident using 12,000 gallons of water per month pays an overall average of $5.68 per thousand gallons of water.  $1.66 of this is for taxes on water and fees. $4.03 is for water. (See chart above)

Today's overall average total water cost of $5.68 per thousand gallons is far more than the $2.52 per thousand gallons paid in 1999.

Oro Valley increased its water cost in June
Oro Valley upped water rates in June.

More money for the town.

Less money for the homeowner.
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