Scottsdale officials could earmark $10 million in next year’s budget to “send a message” to Arizona American Water Co. that the city is serious about confronting the private utility over two recent drinking water contamination scares.
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During budget hearings this week, the City Council also discussed potentially dropping the city sales tax on groceries. And finance officials believe they are close to sealing deals with Phoenix, the Arizona State Land Department and the One Scottsdale development on who pays for the $49 million widening of a portion of Scottsdale Road.
ARIZONA AMERICAN WATER CO.
Craig Clifford, acting city treasurer and chief financial officer, said the council doesn’t need to put any money behind the $10 million Arizona American budget item, but the placeholder gives officials the legal authority to allocate that money and take action during the next fiscal year, if the need arises.
Arizona American customers may have been exposed to trichloroethylene, or TCE, levels on Jan. 16 at quadruple the maximum allowable limit because of a mechanical breakdown at Arizona American’s Miller Road Treatment Facility in Scottsdale. The company had a previous TCE problem in October, but at the time officials said the tainted water was blended with TCE-free water, lowering concentrations to within federal limits.
Arizona American has since announced that the well linked to the TCE problems has been permanently disconnected. But city officials are considering options ranging from working more closely with the private utility to ensure safety to condemning the company’s system and taking it over.
Clifford said the proposed budget item gives the city the flexibility to proceed with such things as an initial study to assess the cost of buying or condemning Arizona American’s system, which serves about 12,000 people in Scottsdale and Paradise Valley. The council would have to approve any allocation, however, he said.
“This gives us the legal ability to proceed,” Clifford said.
Councilman Bob Littlefield said the measure sends a message to Arizona American about the city’s intention to deal with the problem.
“Just so we put everyone on notice that we are serious about this,” he said.
Councilman Wayne Ecton agreed.
“We need to be prepared to move forward if we see fit to do so,” he said.
Meanwhile, Scottsdale stands to lose another $10 million per year in revenue if it cuts its sales tax on food items in groceries, Clifford told the council this week.
“It’s not one-time. It’s perpetually giving up $10 million. That’s nothing to sneeze at,” he said.
Councilman Tony Nelssen has proposed either eliminating 1 percent of the 1.65 percent tax Scottsdale levies on food items bought for home consumption, or to provide some residents an exemption from the grocery tax based on factors like the buyer’s age and economic status.
Nelssen said the move could mean savings of up to $80 a year for an average family of three, he said.
“A lot of us in Scottsdale are fortunate and sometimes we forget. That’s a few items of clothing for your children,” he said. “I know there are people in this community who would benefit from it.”
Councilman Jim Lane said the percentage of income saved by reducing the tax would be greater for low-income families and people on fixed incomes.
“It would affect the people we want to impact,” Lane said.
But Clifford said eliminating the tax could mean cuts to services like the McDowell Sonoran Preserve, transportation and public safety.
“That’s a lot of programs or very deep cuts in our service delivery,” he said.
Mayor Mary Manross said it may be too late to cut the revenue from next year’s budget, but it could be studied for future years.
“This is a very, very tight year,” Manross said.
SCOTTSDALE ROAD WIDENING
Scottsdale is close to wrapping up deals that would provide the bulk of the $49 million needed to widen Scottsdale Road to six lanes between Frank Lloyd Wright Boulevard and Thompson Peak Parkway.
Phoenix, which borders the road’s west side and would benefit from the widening, would kick in about $23.5 million in reimbursement to Scottsdale, Clifford said. Similarly, the State Land Department would pay Scottsdale $5.8 million to improve the roadway bordering stretches of state land.
DMB Associates, developers of the 120-acre, $1.5 billion One Scottsdale commercial/residential project on the northeast corner of Scottsdale Road and Loop 101, would pay $7 million for the segment of roadway adjacent to the development, Clifford said.
Total reimbursement from the city, state, and developer comes to about $36.3 million, while Scottsdale share of the project will total about $12.8 million.
Dan Worth, municipal services general manager, said the Scottsdale Road widening could be done this year.