Looking ahead to growth-related projects, the Fountain Hills Sanitary District has definitely been impacted by the slumping economy and virtual halt to new construction.

“It’s the worst I’ve seen it in the 22 years I’ve been here,” said district Manager Ron Huber.

Since July 1, 2008, only five new homes have connected into the local sewage system.

Not too many years ago that annual number was in the hundreds, but the growth industry that was a Fountain Hills economic mainstay for nearly two decades has ground to a halt.

From a daily operational standpoint, however, the Sanitary District has been relatively immune from the current economy’s ravages, unlike many other government jurisdictions.

The Sanitary District relies predominantly on two major revenue sources for its daily maintenance and operation – monthly user fees and annual property taxes.

Arizona law provides much flexibility for sanitary districts and their boards when it comes to financing short- and long-term projects as well as M&O expenses.

For example, the Fountain Hills Sanitary District is capable of levying a property tax, setting a monthly user fee and imposing hook-up, lateral, capacity and availability fees.

It also collects money from several local golf courses for the use of effluent or reclaimed wastewater for irrigation purposes.

The district also could go to the voters and seek a bond package if that financial avenue would be needed (the district currently does not have any bonded indebtedness, having paid off its final bonds several years ago).

“It really makes my job a whole lot easier,” Huber added. “If we had to rely on sales taxes, for example, we’d be in trouble…

“The economic slowdown really is drastically limiting the amount of money that’s going into our growth-related bank account,” Huber said.

“Our connection fee money is just about used up. Any future money for growth will have to come in the years ahead whenever building picks back up.”

That essentially would be the hook-up and other fees collected from new construction.

Because growth has drastically slowed, however, the district will have less demand in the future to fund capital improvements for growth-related projects.

“But we still have to make sure the sewage flows downhill,” Huber is quick to add, pointing to the M&O costs associated with running a sewage system.

“Our objective right now is to try to make less dollars go further. Next year (fiscal year 2009-10) we want to maintain or lower the property taxes we collect.”

There also are no plans to raise monthly user fees this coming year.

Since the district essentially operates on a 24/7 basis, Huber is not in a position to lay off field employees who are needed to run equipment, monitor systems and perform maintenance work.

The district is currently working on a major multi-million dollar improvement project at the wastewater treatment plant that will improve its efficiency.

Huber also is targeting certain components that can be upgraded to save utility costs into the future.

“One of our biggest expenditures is electricity,” Huber said. “Our power bill is more than $30,000 a month.”

The district has installed some new blowers at the treatment plant and also is studying pump upgrades as a way to save on electricity.

“With our new blowers, we’ve already seen a roughly 25 percent savings on electricity,” Huber said.

The district by December wants to get started on a downtown project that is part of its aquifer recharge and recovery system.

That project is not growth-oriented, so the district will be able to use its major revenue sources and cash on hand to pay for it.

The district cannot use the annual property tax proceeds or other funds – like the monthly user fees – for growth-related projects. They must be used for M&O items.

“We do have more flexibility than other government jurisdictions, so that’s a big help,” Huber said.

“Like I said, we have one purpose in life, to make sure the sewage runs down hill.

“That’s easier to accomplish as long as we meet all the health requirements and can fund our operations.”

Review: 
Economic series, Part One: Surviving financial fallout
Economic series, Part Three: School District
Economic series, Part Four: Construction industry
Economic series, Part Five: Town surviving
Economic series, Part Six: Laid off teachers
Economic series, Part Seven: Stimulus money
Economic series, Part Eight: Food Bank
Economic series, Part Nine: Retailers
Economic series, Part Ten: Mayor impacted
Economic series, Part Eleven: Real Estate