The Second Straw

Part 3: Where’s the money?

By Bob Hembree
Posted 10/30/24

While Page considers ideas, options and possibilities to secure a sufficient and reliable water infrastructure, the city also needs to find funding. The current five infrastructure possibilities are: …

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The Second Straw

Part 3: Where’s the money?

Posted

While Page considers ideas, options and possibilities to secure a sufficient and reliable water infrastructure, the city also needs to find funding. The current five infrastructure possibilities are: to upsize from 12” to 18” pipes from the Glen Canyon Dam’s hollow jet tubes; to build a pipeline from The Chains; to wait over 20 years for the Lake Powell Pipeline; to cross fingers and drill wells; or to work with the Navajo Nation and repurpose the old Navajo Generating Station water infrastructure.

The 2024 “second straw” estimates range from $30 to $70 million and, if rising construction costs continue, the price could increase 10% every year. All the while, Page and LeChee’s aging, solitary waterline inches closer to failure with no backup.

There are currently four water infrastructure financing possibilities. The first is seeking funds from state and federal sources. The city has focused on grants and state funding, including hiring lobbyists to work on their behalf. So far, this hasn’t worked. Even when $23 million in funding was approved for the 2024 Arizona Budget, it never made it to the governor’s desk. There was a misstep in the paperwork chain and the ball was dropped inches from the goal line. Incompetence in government?

The second financing option is a bond. Currently, according to Page City Manager Darren Coldwell, the city can bond up to $25 million. Under community pressure to build a swimming pool, the city approved a hotel tax increase to pay for up to $15 million bond, reducing the city’s bond limit to $10 million.

The third option discussed is using the services of Sustainability Partners, which is essentially a finance company specializing in large infrastructure projects. They would get a percentage of Page Utility Enterprises’ water sales until the contract is fulfilled. Water customers would likely see increases in their monthly bills.

The Chronicle spoke with former PUE board member Ken Sichi about a fourth finance option.

“Even in the joint session meeting, nobody talked about raising water rates. Whenever you raise water rates, you cut back. People cut back on their consumption of water, and you start making more money.

“Tony (PUE Board Chairman Tony Ferrando) and I tried to get them to raise water rates and set that money aside for this water project. Nobody's talking about raising water rates or dedicating x amount of monies to this project.

“You have to put some of the burden on the citizens and say, at least like I said, tell the lobbyists, the senators, whoever we have, ‘We have put as much burden as we feel we can on the citizens.’”

It’s uncertain how many years it would take for Sichi’s idea to finance a $30+ million project unless it was a phased option incrementally paid for and completed over time. Sichi prefers the Carollo Engineers’ option one, to increase pipes from 12” to 18” from the dam’s hollow jet tubes.

“The idea behind the hollow jet tubes is you can do that in phases, and you can pay as you go or you can bond a little bit, you know, however many million you need to bond and say, ‘OK, this year we're doing redundant piping to the pumping station,” said Sichi. “OK, great first step. And then bond it, pay for it, do whatever you’ve got to do. And then once that's done, then you can take on the next bite and say, ‘OK, now let's upgrade the pumping station’ or ‘Let's start on the discharge of the pumps to redundancy.’ It doesn't have to be fully funded to start the project.”

Sichi’s preference is also the least expensive of the five project possibilities, though the U.S. Department of Interior engineers would need to approve cutting 18” holes into the cylinders feeding the dam’s four jet valves. Carollo Engineers indicated there wasn’t enough space for the modifications at the location at which they looked. PUE Manager Bryan Hill said with engineers anything is possible.