2025 Rate Study Report_Revised Final.pdf

City of Buckeye — Regular Council Meeting (2026-04-07)

Extracted text (via pymupdf) 33857 characters

Contents
Recommended Water Base and Usage Rates ............................................................................ 2
Recommended Sewer Base and Usage Rates ............................................................................ 3
Definitions ............................................................................................................................... 3
Introduction ............................................................................................................................. 4
Goals & Objectives ................................................................................................................... 4
1. Conduct a Cost-of-Service (COS) Analysis ......................................................................... 4
2. Establish Revenue Requirements for Each Utility ................................................................ 5
3. Promote Ratepayer Affordability Through Best Practices ..................................................... 5
Approach ................................................................................................................................. 5
Model Development and Review ............................................................................................ 6
Source Data ............................................................................................................................. 6
Beginning Fund Balances ...................................................................................................... 6
Revenues ............................................................................................................................. 6
Expenditures ........................................................................................................................ 6
Capital Improvement Plan (CIP)............................................................................................. 6
Personnel Needs .................................................................................................................. 6
Asset Management Needs ..................................................................................................... 7
Water Utility ............................................................................................................................. 7
Required Revenue Determination .......................................................................................... 7
Water Cost Drivers ................................................................................................................ 7
Projected Reserve Balances ..................................................................................................... 8
Rate Design .............................................................................................................................. 9
Recommendation: Gradualism Scenario (GM) ....................................................................... 9
Base Rate Adjustments ......................................................................................................... 9
Usage Rate Adjustments ..................................................................................................... 10
Wastewater Utility .................................................................................................................. 11
Required Revenue Determination ........................................................................................ 11
Wastewater Cost Drivers ..................................................................................................... 11
Projected Reserve Balances ........................................................ Error! Bookmark not defined.
Rate Design ............................................................................................................................ 13
Recommendation: Gradualism Scenario (GM) ..................................................................... 13
Base & Usage Rate Adjustments .......................................................................................... 13
Recommendations & Conclusions .......................................................................................... 14

Recommended Water Base and Usage Rates

2026
2027
2028
2029
3/4”
$30.02
$31.30
$32.63
$34.01
1”
$33.36
$34.77
$36.25
$37.79
1.5”
$66.51
$69.34
$72.29
$75.36
2”
$106.46
$110.98
$115.70
$120.62
3”
$213.12
$222.18
$231.62
$241.46
4”
$332.96
$347.11
$361.87
$377.25
6”
$665.73
$694.02
$723.52
$754.26
8”
$1,065.20
$1,110.47
$1,157.67
$1,206.87
10”
$1,531.39
$1,596.47
$1,664.32
$1,735.06
Residential Usage Rate
2026
2027
2028
2029
0 – 6k
$4.77
$4.97
$5.18
$5.40
6,001– 10k
$5.96
$6.22
$6.48
$6.76
10,001 – 20k
$7.45
$7.77
$8.10
$8.44
20,001 -30k
$9.69
$10.10
$10.53
$10.98
30,001+
$12.60
$13.13
$13.69
$14.27
Potable Landscape Usage
Rate
2026
2027
2028
2029
0 – 50k
$7.02
$7.32
$7.63
$7.96
50,001+
$8.78
$9.15
$9.54
$9.94
Non-Potable Landscape
Usage Rate
2026
2027
2028
2029
Per 1,000 Gallons
$4.77
$4.97
$5.18
$5.40
2026
2027
2028
2029
3/4”
$70.20
$73.18
$76.29
$79.53
1”
$78.00
$81.31
$84.77
$88.37
1.5”
$155.53
$162.14
$169.03
$176.22
2”
$248.94
$259.52
$270.55
$282.05
3”
$498.35
$519.53
$541.61
$564.63
4”
$778.59
$811.68
$846.17
$882.13
6”
$1,556.71
$1,622.87
$1,691.84
$1,763.74
8”
$2,490.82
$2,596.68
$2,707.04
$2,822.09
10”
$3,580.94
$3,733.13
$3,891.78
$4,057.18
Comm./Multi-Fam. Usage
Rates
2026
2027
2028
2029
0-10K
$9.45
$9.86
$10.27
$10.71
10,001 – 30k
$9.93
$11.09
$11.56
$12.05
30,001 - 50k
$9.93
$12.47
$13.00
$13.55
50,001+
$9.93
$12.47
$14.63
$15.25
Hydrant Meter Usage Rates
2026
2027
2028
2029
Per 1,000 Gallons
$9.93
$12.47
$14.63
$15.25
Meter Size
Commercial, Hydrants & Multi-Family
Proposed Base Rates
Meter Size
Residential and Landscape Proposed Base Rates

Recommended Sewer Base and Usage Rates

Definitions
Customer Class – Residential, Commercial/Multi‑Family, Potable Landscape, and
Non‑Potable Landscape.
Enterprise Fund – A stand‑alone financial fund where user fees cover all costs of service.
2025 Water and Wastewater Rate Committee (WRC) – Seven voting Buckeye residents
(one per district plus one at‑large) and two non‑voting alternates.
Inflation – A sustained rise in general price levels that reduces purchasing power.
Asset Management (AM) – Strategic rehabilitation and replacement of utility assets.
Rate Cycle – A multi-year period in which utility rates are set based on projected
expenditures.
Rate Structure – The combination of base rates, usage tiers, and miscellaneous fees used
to recover costs.
Base Rate – A fixed monthly service charge.
Usage Rate – A variable charge based on metered water consumption.
Cost-of-Service (COS) – The allocation of utility costs to customer classes based on their
share of system usage.
Revenue Requirement – Total funding needed to operate, maintain, and reinvest in the
utility.
Residential Sewer Base Rate
2026
2027
2028
2029
All Meters
$39.44
$42.20
$45.15
$48.31
Res. Sewer Usage Rate
2026
2027
2028
2029
Per 1,000 Gallons
$0.00
$0.00
$0.00
$0.00
Commercial Sewer Base Rate
2026
2027
2028
2029
(per Meter Size)
¾”
$43.50
$46.55
$49.80
$53.29
1”
$72.65
$77.73
$83.17
$88.99
1.5”
$144.86
$154.99
$165.84
$177.45
2”
$231.86
$248.08
$265.45
$284.03
3”
$464.15
$496.64
$531.40
$568.60
4”
$725.15
$775.91
$830.22
$888.33
6”
$1,449.86
$1,551.34
$1,659.94
$1,776.13
Comm. Sewer Usage Rate
2026
2027
2028
2029
Per 1,000 Gallons
$4.00
$5.00
$5.72
$6.13

Introduction
The City of Buckeye provides water and wastewater services to approximately 33,000 water
connections and 35,000 wastewater connections across its 640‑square‑mile service area.
As enterprise-funded utilities, these services must be financially self-sustaining through
user rates and fees.
The last water rate adjustments were implemented in 2020 and wastewater rates in 2016. In
that time, despite rising costs and significant citywide growth, the Water Resources
Department (WRD) has maintained quality service delivery through effective management
strategies and strict operational efficiency. However, the utilities face serious financial
pressures due to:
• Nearly 25% cumulative inflation since 2020.
• Significant Asset Management (AM) demands from aging and expanding
infrastructure.
• Increasing operational costs driven by system growth and rising utility expenses.
• The ongoing need to maintain safe, reliable, and compliant water and wastewater
services.
In 2025, the WRD—working collaboratively with the Finance Department (FIN) and the 2025
Citizen Water and Wastewater Rate Committee (WRC)—completed a comprehensive rate
study to restore enterprise fund stability and ensure long-term resilience.
After receiving extensive feedback from the public, city management, and the Buckeye City
Council, the established recommendations were further modified.
This report summarizes the results of the rate study and the WRC’s recommendations to the
Buckeye City Council, and the subsequent modifications to the recommendations.
This study does not include meter fees or irrigation rate adjustments.

Goals & Objectives
The predominant goal of the rate study was to stabilize and strengthen the financial position
of the water and wastewater utilities without causing undue hardship to any customer class.
To achieve this goal, the study pursued the following objectives:
1. Conduct a Cost-of-Service (COS) Analysis
• Determine each customer class’s fair share of system costs.
• Ensure no customer class subsidizes another.

2. Establish Revenue Requirements for Each Utility
Develop a multi-year rate schedule that generates sufficient revenue to:
• Fund essential Asset Management, portfolio needs, and annual operations.
• Maintain 17% emergency reserve levels, as required by city policy.
• Meet required debt service coverage ratios.
• Provide reliable funding for capital projects necessary to support citywide growth.
3. Promote Ratepayer Affordability Through Best Practices
• Strategically leverage debt to reduce near-term rate impacts.
• Phase in adjustments gradually to promote long-term rate stability.

Approach
The study evaluated current and projected enterprise fund revenues against overall financial
requirements over a five-year period (FY26–FY30). After conducting COS allocations and
establishing revenue requirements, WRD and FIN evaluated multiple rate scenarios with the
WRC.
On October 9, 2025, the WRC unanimously recommended the Gradualism Scenario, a
phased rate adjustment approach that:
• Provides consistent and predictable year-over-year revenue increases from 2026 to
2030.
• Builds AM and portfolio budgets to sustainable levels.
• Maintains affordability by avoiding steep, one-time rate increases.
Under the current (pre-adjustment) structure, rate revenue only increases through
customer growth. However, these new accounts generate additional operating costs that
offset any benefit from added revenue. Without rate adjustments, no economies of scale
are realized.
After public outreach efforts and further staff analysis, it was determined that a four-year
rate cycle was more appropriate due to planned future debt issuance. Under the
recommended scenario, rate revenues increase by 35% over the four-year cycle, enabling
the city to:
• Begin proactive AM implementation.
• Invest in critical capital projects.
• Stabilize fund balances.

Model Development and Review
The city contracted Willdan to develop a comprehensive financial model incorporating
revenues, expenditures, customer growth, AM needs, capital improvement planning, and
debt service. WRD and FIN staff then designed rate strategies using this model, and the WRC
reviewed and evaluated multiple alternatives.
After extensive feedback from the public, city management, and Buckeye City Council, the
rates were further refined. Commercial, Hydrant, and Multi-family water base rates were
separated from Residential, Potable Landscape, and Non-Potable Landscape.
Additionally, the recommended rate cycle was reduced from five years to four years.

Source Data
Beginning Fund Balances
Finance Department data established the starting fund balances for both utilities.
Revenues
Utility revenue includes rate revenue, interest earnings, and miscellaneous service fees.
While based on the budget, FY26 reflects an anticipated rate adjustment; FY27–FY30
include projected customer growth, rate adjustments, and usage trends.
Expenditures
Revenue requirements include O&M expenses, personnel, asset Management, portfolio
costs, interfund transfers, debt service, and capital investment needs.
Cost escalation assumptions follow city policy and historical averages.
Capital Improvement Plan (CIP)
The continuous investment into the utility’s infrastructure needs, specifically expansion and
treatment, is a critical element of the utility’s financial plans.
Personnel Needs
Projected staffing increases reflect incoming infrastructure and service area growth:
Utility
FY27
FY28
FY29 FY30
New Water FTE
3.5
5.5
4
2
New Wastewater FTE
1
2.5
2
3
Personnel costs assume 12% annual growth (merit, COLA, insurance, liability).

Asset Management Needs
Year-Over-Year (YOY) asset management needs were developed based on manufacturer
and industry standard rehabilitation and replacement schedules and analysis of known
issues.

Water Utility
Required Revenue Determination
The analysis determined that current water rates are insufficient to meet future financial
obligations. Gradual annual increases are required to close the gap between projected
revenues and projected costs.
Water and wastewater rate revenues in each year are calculated based on the assumption
the recommended rate increases are approved, projected growth is realized and expected
billing volumes maintain historical growth trends.
Water Cost Drivers
1. Asset Management (AM)
The most significant cost driver, AM, requires consistent funding to ensure the proper
rehabilitation and replacement of assets critical to the delivery of service. To this point,
proactive AM practices have not been in place and rehabilitation, and replacement activities
have only been performed reactively. This method of management is considerably more
expensive and is unsustainable.

By FY26, WRD will manage $791 million in critical water assets. Industry-standard AM
budgets target 2% of asset value (~$15.28 million annually). However, the rate increases
needed to immediately create a 2% AM budget would cause a detrimental impact to the City
of Buckeye customer’s combined utility bill. Moreover, the city does not yet possess the
resources (personnel, supporting department resources, etc.) to execute a 2% AM budget.
The proposed rates support a phased build‑up beginning with $3.4 million in FY27 and
increasing to $7.1 million in 2029.

2. Operations
Operational costs are rising due to:
• Inflation
• An anticipated 14–16% electric rate increase
• Additional
infrastructure
requiring
chemicals,
electricity,
vehicles,
and
maintenance.

3. Portfolio
Portfolio costs represent long-term water supply and management investments. The
proposed rates build up a stable portfolio budget beginning with $5.5 million in FY27 and
increasing 10% annually.

4. Capital Improvement Requirements
Major capital projections for the Water utility through FY30 include significant investments
in treatment, expansion, pressure management, and groundwater treatment projects. It is
anticipated that $45.1 million of major capital will be funded by rates, and an additional
$50.5 million will come from impact fees.
Projected Reserve Balance and Debt Coverage Ratio
Based on the City’s financial policies, the water fund currently maintains an operating
reserve equal to 17% of the utility’s rate revenue. Additionally, a debt service coverage ratio
of at least 1.2 times our debt service obligations is required by financial policies.
As recommended, the rate plan can meet these two metrics while maintaining an operating
surplus. The following schedule outlines the anticipated performance against these metrics
and estimated cashflow for the five-year period.

Rate Design
Recommendation: Gradualism Scenario (GM)
Under the recommended scenario, rate adjustments occur annually through the 2026–2029
rate cycle, improving fund stability and abating ratepayer impacts.
Base Rate Adjustments
The proposed restructuring realigns base rates with meter flow capacity, correcting
inconsistencies in the current structure. As such, base rate changes for Residential, Potable
Landscape and Non-Potable Landscape have been adjusted as depicted below.

2026
2027
2028
2029
2030
Operations
Water Rate Revenue Increases
4.25%
4.25%
4.25%
4.25%
4.25%
% of Year Rate Increase Effective
8.00%
50.00%
50.00%
50.00%
50.00%
Beginning Unrestricted Fund Balance
48,886,025
$
30,538,018
$
19,834,768
$
30,182,929
$
18,982,100
$
Rate Revenue 1
38,725,443
$
42,673,964
$
46,991,444
$
51,695,228
$
56,586,889
$
Total Rate Revenue
38,725,443
$
42,673,964
$
46,991,444
$
51,695,228
$
56,586,889
$
Other Operating Revenue
6,086,153

4,663,043

4,743,778

4,828,549

4,917,559

Interest Income - Operating Fund
1,946,997

678,300

657,800

633,400

368,500

Total Operating Revenue
46,758,593
$
48,015,307
$
52,393,021
$
57,157,177
$
61,872,948
$
Operating Expenses
(34,734,100)

(35,518,700)

(39,335,700)

(43,452,500)

(48,079,900)

Net Revenue
12,024,493
$
12,496,607
$
13,057,321
$
13,704,677
$
13,793,048
$
Plus:
Other Sources of Funds
Repair and Replacement Funding
500,000

Debt Proceeds
-

25,000,000

Less:
Other Uses of Funds
Minor Capital
(1,447,300)
$
(1,592,100)
$
(1,751,300)
$
(1,926,400)
$
(2,119,000)
$
Major Capital
(20,000,000)

(6,662,500)

(10,243,594)

(5,384,453)

(2,759,532)

Non Operating Expenses
-

(5,517,600)

(6,069,360)

(6,676,296)

(7,343,926)

Existing Revenue Bond Debt Service
(9,425,200)

(9,427,656)

(9,426,156)

(9,425,856)

(9,426,656)

New Revenue Bond Debt Service
-

(218,750)

(1,492,500)

(1,471,500)

Net Cash Flow
(18,348,007)
$
(10,703,249)
$
10,348,161
$
(11,200,829)
$
(9,327,567)
$
Ending Unrestricted Fund Balance
30,538,018
$
19,834,768
$
30,182,929
$
18,982,100
$
9,654,533
$
Financial Policy Required Reserve
6,583,325

7,254,574

7,988,545

8,788,189

9,619,771

Variance Above/(Below) Fund Balance Target
23,954,692

12,580,194

22,194,384

10,193,911

34,762

Operating Surplus/(Deficit)
1,151,993

1,476,851

1,661,115

859,920

775,891

Debt Service Coverage Calculations:
Revenue Bond Debt Service Coverage
Rate Covenant Debt Service Coverage Test (Operations):
Net Revenue Available for Debt Service Coverage Test
12,024,493
$
12,496,607
$
13,057,321
$
13,704,677
$
13,793,048
$
Revenue Bond Debt Service:
Existing Revenue Bond Debt Service
9,425,200

9,427,656

9,426,156

9,425,856

9,426,656

New Revenue Bond Debt Service
-

218,750

1,492,500

1,471,500

Total Revenue Bond Debt Service
9,425,200
$
9,427,656
$
9,644,906
$
10,918,356
$
10,898,156
$
Debt Service Coverage - Operations
1.28

1.33

1.35

1.26

1.27

Debt Service Coverage Requirement
1.20

1.20

City of Buckeye - Water
Pro Forma with Debt Service Coverage and Fund Balance Reconciliation
2026
2027
2028
2029
5.99
$29.65
$22.17
3/4”
$30.02
$31.30
$32.63
$34.01
5.99
$86.61
$60.06
1”
$33.36
$34.77
$36.25
$37.79
5.99
$86.61
$60.06
1.5”
$66.51
$69.34
$72.29
$75.36
5.99
$225.92
$160.19
2”
$106.46
$110.98
$115.70
$120.62
5.99
$225.92
$160.19
3”
$213.12
$222.18
$231.62
$241.46
5.99
$420.94
$300.36
4”
$332.96
$347.11
$361.87
$377.25
5.99
$699.53
$500.59
6”
$665.73
$694.02
$723.52
$754.26
5.99
$1,396.00
$1,001.18
8”
$1,065.20
$1,110.47
$1,157.67
$1,206.87
5.99
$1,396.00
$1,001.18
10”
$1,531.39
$1,596.47
$1,664.32
$1,735.06
Residential and Landscape Proposed Base Rates
Current
Residential*
Current Potable
Landscape*
Current Non-Potable
Landscape
Meter Size

Commercial base rates have also been reconfigured to reflect the increased flow per meter
size below.

Usage Rate Adjustments
Several adjustments were also made to the usage rate structures; however, they remain
customer-class-specific and reflect typical consumption patterns:
• Residential usage tends to be stable and low. The monthly demand this customer
class will place on the system is more easily projected allowing for accurate planning
of supply management and operations.
• Commercial and landscape usage tends to fluctuate dramatically making their usage
more difficult to project and plan for.
Residential tier changes include:
• Expanding Tier 3 to 20,000 gallons, giving the few residential customers in this tier
more room to stay in Tier 3 rather than being pushed up to the higher rate of Tier 4.
• Shifting Tier 4 to 20,001–30,000 gallons.
Commercial, potable landscape, and non-potable landscape usage rates are also given
new or updated tier structures.
2026
2027
2028
2029
$37.40
3/4”
$70.20
$73.18
$76.29
$79.53
$111.04
1”
$78.00
$81.31
$84.77
$88.37
$111.04
1.5”
$155.53
$162.14
$169.03
$176.22
$290.85
2”
$248.94
$259.52
$270.55
$282.05
$290.85
3”
$498.35
$519.53
$541.61
$564.63
$542.68
4”
$778.59
$811.68
$846.17
$882.13
$902.43
6”
$1,556.71
$1,622.87
$1,691.84
$1,763.74
$1,801.80
8”
$2,490.82
$2,596.68
$2,707.04
$2,822.09
$1,801.80
10”
$3,580.94
$3,733.13
$3,891.78
$4,057.18
Current
Commercial/Multi-
Family*
Meter Size
Proposed Rates - Commercial
Residential Usage Rate
2026
2027
2028
2029
0 – 6k
$4.77
$4.97
$5.18
$5.40
6,001– 10k
$5.96
$6.22
$6.48
$6.76
10,001 – 20k
$7.45
$7.77
$8.10
$8.44
20,001 -30k
$9.69
$10.10
$10.53
$10.98
30,001+
$12.60
$13.13
$13.69
$14.27

Wastewater Utility
Required Revenue Determination
The analysis determined that current wastewater rates are insufficient to meet future
financial obligations. Gradual annual increases are required to close the gap between
projected revenues and projected costs.
Wastewater rate revenues in each year are calculated based on the assumption the
recommended rate increases are approved, projected growth is realized and expected
billing volumes maintain historical growth trends.
Wastewater Cost Drivers
1. Asset Management (AM)
The most significant cost driver, AM, requires consistent funding to ensure the proper
rehabilitation and replacement of assets critical to the delivery of service. To this point,
proactive AM practices have not been in place and rehabilitation and replacement activities
have only been performed reactively. This method of management is considerably more
expensive and is unsustainable.

By FY26, WRD will manage $451 million in critical wastewater assets. Industry-standard AM
budgets target 2% of asset value (~$9 million annually). However, the rate increases needed
to immediately create a 2% AM budget would cause a detrimental impact to the City of
Buckeye customer’s combined utility bill. Moreover, the city does not yet possess the
resources (personnel, supporting department resources, etc.) to execute a 2% AM budget.
The proposed rates support a phased build‑up beginning with $1.8 million in FY27 and
increasing to $5.2 million in 2029.

2. Operations
Operational costs are rising due to:
• Inflation
Potable Landscape Usage
2026
2027
2028
2029
0 – 50k
$7.02
$7.32
$7.63
$7.96
50,001+
$8.78
$9.15
$9.54
$9.94
Comm./Multi-Fam. Usage
Rates
2026
2027
2028
2029
0-10K
$9.45
$9.86
$10.27
$10.71
10,001 – 30k
$9.93
$11.09
$11.56
$12.05
30,001 - 50k
$9.93
$12.47
$13.00
$13.55
50,001+
$9.93
$12.47
$14.63
$15.25
Non-Potable Landscape
2026
2027
2028
2029
Per 1,000 Gallons
$4.77
$4.97
$5.18
$5.40

• An anticipated 14–16% APS electric rate increase
• Additional
infrastructure
requiring
chemicals,
electricity,
vehicles,
and
maintenance.
3. Capital Improvement Requirements
Major capital projections for the Wastewater utility through FY30 include significant
investments in treatment and expansion projects. It is anticipated that $91.4 million of
major capital will be funded by rates, with an additional $45.5 million will come from impact
fees.
Projected Reserve Balance and Debt Coverage Ratio
Based on the City’s financial policies, the wastewater fund currently maintains an operating
reserve equal to 17% of the utility’s rate revenue. Additionally, a debt service coverage ratio
of at least 1.2 times our debt service obligations is required by the financial policies.
As recommended, the rate plan can meet these two metrics along while maintaining an
operating surplus. The following schedule outlines the anticipated performance against
these metrics and estimated cashflow for the five-year period.

Rate Design
Recommendation: Gradualism Scenario (GM)
Under the recommended scenario, rate adjustments occur annually through the 2026–2029
rate cycle, improving fund stability and abating ratepayer impacts.
Base & Usage Rate Adjustments
The base rate for wastewater (sewer) customers has also been adjusted.
Under the GM scenario, residential sewer customers will no longer be charged a usage rate.
As a result, the winter-quarter average will also go away. Instead, staff developed an
inclusive base rate for residential customers based on the following:
• The average Buckeye sewer customer uses 4,000 gallons of water per month.
• Of those 4,000 gallons, only 40% (1,600 gallons) comes back to our reclamation
facilities for treatment.
• The cost of treating 1,000 gallons is $4.24.
2026
2027
2028
2029
2030
Operations
Wastewater Rate Revenue Increases
7.00%
7.00%
7.00%
7.00%
7.00%
% of Year Rate Increase Effective
8.00%
50.00%
50.00%
50.00%
50.00%
Beginning Unrestricted Fund Balance
19,064,283
$
28,945,936
$
16,092,216
$
25,897,426
$
8,241,146
$
-

17,683,901
$
20,204,725
$
22,427,139
$
24,596,965
$
26,976,721
$
Total Rate Revenue
17,683,901
$
20,204,725
$
22,427,139
$
24,596,965
$
26,976,721
$
Other Operating Revenue
2,251,552

2,285,262

2,320,658

2,357,824

2,396,847

Interest Income - Operating Fund
600,000

588,600

546,100

430,200

344,900

Total Operating Revenue
20,535,453
$
23,078,587
$
25,293,897
$
27,384,989
$
29,718,468
$
Operating Expenses
(15,538,600)

(16,748,182)

(18,912,782)

(22,278,491)

(24,586,876)

Net Revenue
4,996,853
$
6,330,405
$
6,381,115
$
5,106,498
$
5,131,592
$
Plus:
Other Sources of Funds
Debt Proceeds
30,000,000

25,000,000

Grant Proceeds
500,000

3,750,000

Less:
Other Uses of Funds
Minor Capital
(698,000)
$
(767,800)
$
(844,580)
$
(929,038)
$
(1,021,942)
$
Major Capital
(22,750,000)

(19,090,625)

(17,440,375)

(17,822,540)

(14,349,568)

Existing Revenue Bond Debt Service
(1,904,700)

(1,904,700)

(1,572,500)

New Revenue Bond Debt Service
(262,500)

(1,171,000)

(1,386,250)

(2,106,500)

(2,320,000)

Net Cash Flow
9,881,653
$
(12,853,720)
$
9,805,210
$
(17,656,280)
$
10,867,583
$
Ending Unrestricted Fund Balance
28,945,936
$
16,092,216
$
25,897,426
$
8,241,146
$
19,108,728
$
Target Unrestricted Fund Balance
3,422,576

3,846,431

4,215,650

4,564,165

4,953,078

Amount Above/(Below) Target
25,523,360

12,245,785

21,681,776

3,676,981

14,155,650

Operating Surplus/(Deficit)
2,131,653

2,486,905

2,245,585

166,260

217,150

Debt Service Coverage Calculations:
Revenue Bond Debt Service Coverage
Rate Covenant Debt Service Coverage Test (Operations):
Net Revenue Available for Debt Service Coverage Test
4,996,853
$
6,330,405
$
6,381,115
$
5,106,498
$
5,131,592
$
Revenue Bond Debt Service:
Existing Revenue Bond Debt Service
1,904,700

1,904,700

1,572,500

New Revenue Bond Debt Service
262,500

1,171,000

1,386,250

2,106,500

2,320,000

Total Revenue Bond Debt Service
2,167,200
$
3,075,700
$
3,290,950
$
4,011,200
$
3,892,500
$
Debt Service Coverage - Operations
2.31

2.06

1.94

1.27

1.32

Debt Service Coverage Requirement
1.20

1.20

City of Buckeye - Wastewater
Pro Forma with Debt Service Coverage and Fund Balance Reconciliation

• Inflation from 2016 to 2025 is 27% (3% per year); however, it was determined that
increase would cause too much of a burden on ratepayers; therefore,
o The base rate was raised to $35.20 (21.97% x $28.86), and
o $4.24 was added to the base to cover the majority of the average customer’s
wastewater (sewer) treatment costs.
o The recommended base rate for residential customers is then $39.44 for year
one of Cycle 1.

Like the water base rates, the sewer (wastewater) base rates for Commercial/Multi-Family
customers were not consistent with generally accepted best practice rate structures.
Therefore, the base rates for Commercial/Multi-Family customers have also been adjusted
to reflect the meter size. Likewise, the usage rate was adjusted to reflect the cost to treat
per thousand gallons.

Recommendations & Conclusions
The 2025 rate study concludes that without rate adjustments, both the water and
wastewater enterprise funds face critical financial shortfalls. The recommended
Gradualism Scenario provides:
• Predictable, phased rate increases.
• Sustainable funding for Asset Management and capital improvements.
• Improved reserve levels.
• Financial resilience to support Buckeye’s rapid growth.
This rate plan restores stability to the City of Buckeye’s utilities while protecting residents
from unnecessary financial burden and ensuring long-term reliability of essential water and
wastewater services.
Residential Sewer Base Rate
2026
2027
2028
2029
All Meters
$39.44
$42.20
$45.15
$48.31
Commercial Sewer Base Rate
2026
2027
2028
2029
(per Meter Size)
¾”
$43.50
$46.55
$49.80
$53.29
1”
$72.65
$77.73
$83.17
$88.99
1.5”
$144.86
$154.99
$165.84
$177.45
2”
$231.86
$248.08
$265.45
$284.03
3”
$464.15
$496.64
$531.40
$568.60
4”
$725.15
$775.91
$830.22
$888.33
6”
$1,449.86
$1,551.34
$1,659.94
$1,776.13
Comm. Sewer Usage Rate
2026
2027
2028
2029
Per 1,000 Gallons
$4.00
$5.00
$5.72
$6.13