Utility Rates

Utility Fund Expenses

Similar to other Valley cities, the City of Mesa provides citywide water, wastewater, and solid waste services. Natural gas utility services are provided to a portion of the City of Mesa as well as to the Magma Service Area, which is located in Pinal County. In addition, Mesa provides electric utility services to the area around downtown Mesa.

The revenues collected by the City’s different utilities pay for the following expenses:

Operating Expenses

The operating expenses include expenses related to operating each utility on a day-to-day basis. Each utility has unique operating expenses depending on the service provided. Significant operating costs for each utility include:

Water: personnel, water commodity purchases, water treatment plant chemicals, distribution system power costs, joint venture payments to operate the Val Vista Water Treatment Plant
Wastewater: personnel, water reclamation plant chemicals, distribution power costs, joint venture payments to operate the 91st Avenue Water Reclamation Plant and Greenfield Water Reclamation Plant
Solid Waste: personnel, landfill and recycling costs, the Household Hazardous Materials facility, and vehicle maintenance and repair
Electric: personnel, infrastructure maintenance, and outage management
Natural Gas: personnel, infrastructure maintenance, system monitoring

Electric & Natural Gas Commodity Cost Pass-Throughs

The City of Mesa has the Electric Energy Cost Adjustment Factor (EECAF) and the Purchased Natural Gas Cost Adjustment Factor (PNGCAF). The EECAF and PNGCAF expenses are related to the acquisition and supply of the electric and natural gas commodities. These commodities are purchased through contracts and market purchases depending on the daily needs of the electric and natural gas utility systems. These costs are passed through directly to the customer by a separate monthly EECAF and PNGCAF rate to achieve cost recovery. The revenues generated from the EECAF and PNGCAF are not subject to the General Fund Transfer.

Infrastructure Bond/Obligation Payment Transfers

The debt service transfers from the Utility Fund to the Debt Service Funds cover the annual principal and interest payments required by each utility’s debt service schedule.

Debt issuances are made by the City to fund capital projects for the utilities. Utility debt issuance schedules are usually set for a term of 24 years. Nearly all capital projects funded by these issuances have a useful life beyond 24 years.

Infrastructure Cash Payment Transfers

The capital and lifecycle transfers from the Utility Fund pay for cash funded projects and lifecycle/infrastructure expenses for each utility. These expenses include vehicle purchases, smaller capital projects that don’t require a debt issuance, as well as infrastructure and lifecycle replacements for equipment at water treatment and water reclamation plants.

General Fund Transfer

The Utility Fund transfer to the General Fund is calculated based off 30% of each utility’s gross operating revenues which excludes the commodity cost pass-throughs. The amount of the transfer throughout the forecast period is adjusted based on the gross operating revenue forecasted for each fiscal year. The City Council adopted this process in 1945 when it eliminated the Primary Property Tax. On March 16, 2020, City Council adopted Ordinance No. 5559 and the transfer is calculated as follows:

FY 2025/26 Budgeted General Fund Transfer: $147,126,827

25% for Public Safety (83.3%): $122,605,689
5% for all General Fund Departments (16.7%)
- 57% of GF budget supports Public Safety: $13,977,049
- 43% of GF budget supports all other GF Departments: $10,544,089

FY 2025/26 Utility Fund transfer support for Public Safety: $136,582,738

FY 2025/26 Utility Fund transfer support for all other GF departments: $10,544,089