The Camp Verde Town Council discussed sewer rate options — in response to the public’s request for usage-based rates to replace the current fixture-based structure — at their work session on Jan. 28.
Utilities Director Lisa Vaughan and utilities analyst Kristen Gressley presented the sewer rate proposal to council. They shared that the public had raised concerns regarding the equity of fixture-based versus usage-based billing and that the monthly rate cost is too high.
Fixture-count billing for sewer rates was chosen over usage in 2023 because the town did not own or operate the town’s primary water company when the town first acquired the Camp Verde Sanitary District in 2013.
Without access to customers’ water usage, the town could not implement usage based fees. Following the town’s acquisition of the water system, usage fees became possible, but a 2023 water rate study proved it too expensive and burdensome on the customer.
Staff provided three possible options:
■ Stay with the fixture-based rate
■ Switch to usage-based rates
■ Make amendments that focus on lowering the overall rates.
An option to have a flat rate was removed as a feasible option.
The current fixture-based rate schedule already went through rigorous council approval and meets the financial requirements for operating the town’s wastewater services, the town stated. Keeping the fixed count billing in place would also maintain predictability for the customer. Account holders have expressed that the fees are too high or not equitable, with the main complaint being that a low fixture-count household with a large family pays less than a high fixture-count household of one person.
Overall, the fixture-based rate is less burdensome to the customer and allows for a rate cap on residential accounts, the town sated.
When discussing the options, Vaughan and Gressley asked the council to consider if lower rates or increased equity were more important to the account holders. If equity is most important, then staff recommends usage-based rates.
For usage-based rates, there would still remain a base fee for service maintenance on top of the usage charge for actual water through the pipes. Based on a 2023 usage-based proposal, each customer was worse off with a switch to usage-based rates compared to a fixed rate.
Staff explored the possibility of creating a usage-based rate schedule that’s more reasonable and equitable by defining the average rate per customer to establish residential rates. The town charged its customers a total of $169,190 for December 2025. Over 12 months, this amount exceeds the $1.8 million required to meet the town’s operational needs while accommodating several years’ worth of 3% annual increases. Dividing the residential charges of $78,584.85 by the number of residential accounts — 1,223 — equals a monthly average of $73.86 per residential customer as the benchmark for establishing a usage-based rate schedule.
A pro to adopting the usage-based fee option, town staff presented, is that it’s the most equitable option. Most of what customers are charged is for what they actually use. Cons to adopting this option include a lack of cost control and predictability. The town must maintain the $1.8 million per year in revenue despite the fact that revenue would fluctuate, so rates must be higher than a fixture count to accommodate for unpredictable revenue.
Vaughan and Gressley both said 67% of customers are worse off under usage-based fees, which is why they recommend the third amended option that focuses on lowering the overall rates. They shared that people often want usage-based fees because they believe it will be cheaper.
The third option addresses lowering overall residential user fee costs through either a fixture or usage based rate. With this option, the town can look at other ways to reduce user fees while bringing in revenue, such as lower average rates and low income-discounts offset by increased capacity fees and increased septage dumping fees. Both capacity and septage fees were identified as revenue categories that do not carry their revenue load and burden customers. By adjusting capacity and septage charges, the revenue strain on monthly rates can be reduced for residential users, thus proportionally reducing residential rates. It also allows for a low-income discount option.
The town’s sewer capacity fees are far below neighboring municipalities. For example, Camp Verde’s Wastewater Division charges $1,750 for their sewer capacity fee, which is less than half the typical residential fee that Cottonwood charges, at $4,502.
The town currently charges $0.16 per gallon to dump septage, which does not cover the cost of processing that septage. The cost not covered is passed on to the town’s customers. This price is also well below market rate. For example, Prescott charges $0.21 per gallon. Staff recommends increasing the fee to $0.21 or even doubling it, which would decrease user fees by 40% to 60%. Staff recommends that the town re-evaluate sewer capacity fees and conduct a septage rate study to find a price per gallon that appropriately covers costs.
Town staff recommends pursuing the third option because past studies have shown no real savings when switching from a fixture to usage-based rate, plus the town has already contracted Wildon Consultant Financial LLC to complete a development impact fee study. They also recommend finding better ways to decrease revenue burden on customers first before revisiting the idea of switching to usage-based rates.
The majority of council agreed moving forward exploring option three.
Town Manager Miranda Fisher clarified that for FY27 the town will still be on the fixture count. There was also an increase in water and sewer fees passed in 2022 that will apply to all 2026 bills, so while the fixture count stays in effect, the rate will increase.
