Tohono O'odham Utility Authority
Full-Cost Pricing for Successful Preventative Operations and Maintenance
The Tohono O'odham Utility Authority (TOUA or Utility) provides drinking
water, wastewater, propane, electric, internet and telephone services to
residents living on tribal lands of the Tohono O'odham Nation. TOUA's
drinking water program is responsible for operating and maintaining 29
Community Water Systems (CWSs) distributed over 2.8 million acres.
Despite the logistical challenges of a large coverage area, TOUA provides
customers with quality drinking water at reasonable rates. In the last
several years, TOUA's drinking water and wastewater department (the
Department) has achieved its goal of becoming a "zero bottom line utility"
through a combination of a sound rate structure, successful fee collection
and proactive management of operation and maintenance (O&M)
expenses. As a zero bottom line utility, the revenue from customer fees is
equal to or greater than utility expenses. This approach uses a full-cost
pricing rate structure.
The Department realizes many benefits from its strong billing and collection
program. As recently as 2012, the drinking water and wastewater program
costs exceeded revenues.
Achieving a zero bottom line has also allowed the water and wastewater
department to focus on effectively utilizing staff and planning for future
improvements. The Department has been able to develop innovative
approaches to proactively address customer needs. One example is TOUA's
plumbing service program. By offering customers basic plumbing services
for a reasonable fee the Department is better able to manage leaks, thus
reducing long term maintenance costs.
TOUA staff also noted the significant benefits and reduced O&M costs that
rural systems can achieve through incorporating technological upgrades.
The Department was recently able to implement the projects that are
described below in an effort to further improve system efficiency and staff
4 The Department upgraded their billing software and developed a web
portal so customers can see their balance and usage and pay their bills
online. In the past, most people were travelling to the headquarters
office in Sells, Arizona to pay their bills, a drive of 60 to 70 miles for
many customers.
4 TOUA is in the process of replacing old electric meters with automatic
read meters, and plans to do the same for water meters in the near
Tohono O'odham
Utility Authority's Purpose
A To plan for, provide and
furnish utility services to all
areas within the Tohono
O'odham Nation, where such
services are determined to be
feasible and economic.
A To promote the use of utility
services where available in
order to improve the health
and welfare of the residents
of the Tohono O'odham
A To acquire, construct,
operate, maintain, promote
and expand utility systems.
A To provide utility service to
the Tohono O'odham at the
lowest possible cost
consistent with prudent fiscal
A To use the revenues of the
Authority... to pay the costs
of operations and
maintenance; to amortize the
loans of the Authority; to fund
an adequate Renewal and
Replacement fund; to educate
the Tohono O'odham people
in the proper, efficient and
economical use of all utilities;
to accelerate the retirement
of long term debt; to provide
a fair return to the Nation on
its investment.
Adapted from TOUA 1999
Plan of Operation
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future. Reducing the time staff spend manually reading meters will increase
efficiency and reduce O&M costs for the utility.
TOUA is owned and operated by the Tohono O'odham Nation, which covers over 2.8 million acres west of
Tucson, Arizona. The Tohono O'odham Nation's headquarters is located in Sells, Arizona. TOUA was established
as an enterprise by the Tribe's Legislative Council in 19701. TOUA currently operates in accordance with the
requirements of a "Plan of Operation" approved by the Tribe's Legislative Council. The Plan of Operation defines
TOUA's purpose and establishes a Management Board. The Management Board consists of seven Directors,
three of which are required to be members of the Tribe. The other four Directors must have business
management experience, three of whom must have experience in management and operations of a utility. The
Management Board develops business plans to provide utility services to the Tribe and establishes policies, rules
and regulations for service.
TOUA Drinking Water
and Wastewater
TOUA's drinking water program serves over 3,000 customer
connections, including 2,800 residential connections and 357
commercial connections. The wastewater program serves
over 1,700 customer connections, including 1,600 residential
connections and 183 commercial connections. There are 25
total employees in the water and wastewater department
TOUA has staff dedicated to billing and administrative tasks
thatsupport the financial health of the waterand wastewater
In 2002, the TOUA drinking water program managed over 50
CWSs. Today the number of CWSs has been reduced to 29
through consolidation activities, which allows for more cost-
effective infrastructure management at each CWS. TOUA is
currently working with the Indian Health Service (IHS) and the
Environmental Protection Agency (EPA) to further regionalize
systems through consolidation, with a goal of reducing the number of wells and water storage tanks that need
to be maintained. The Department still operates and maintains 57 wells.
Rate Structure and Billing Program
Rate Structure
TOUA's rate structure, billing and collections program originated in the late 1980's to early 1990's when utility
management developed a customer education program that included a written disconnection policy. Today,
TOUA uses a step rate structure with a declining block rate. The rates are heavily loaded in fixed charges, so
1 By Tohono O'odham Nation Resolution No. 18-70 approving the TOUA Plan of Operation.
Tonfo National
—53 o
National Forest
Siena Vista
Agua Prieta
Figure 1. Location of Tohono O'odham Nation
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small changes in customer usage don't impact the Department's revenue stream. A series of rate increases over
a three (3) year period , the most recent in 2016, allowed the Department to achieve its goal of becoming a zero
bottom line utility." The first rate adjustment brought the Department into solvency, while the second rate
adjustment allowed the Department to generate revenue that is used to maintain adequate staffing and
perform deferred maintenance tasks. TOUA calculates rates based on operating costs and rates at comparable
systems in the region. TOUA funds fixed operating costs in the flat fee portion of the customer's bill, while costs
related to volume of water consumed (such as chemical treatment) are accounted for in the variable portion of
the bill.
All residential, commercial and irrigation TOUA customers are metered with specific rates for each customer
type. Although the cost to provide water is higher at more remote systems, the same rates are applied across
all CWSs on the reservation so that fees are equitable between customers.
The Plan of Operation gives the Management
Board authority to approve the utility rates.
The board feels that rates must be adequate to
operate and maintain the Department but also
reasonable and as low as possible. As such, the
Tribe has a provision that if 5 percent of the
customers raise concerns about the rate
increase, the Tribe will retain an independent
entity to determine whether the rates are
considered reasonable. The 5 percent
threshold has not been exceeded during the
tenure of the current Management Board.
Billing and Collection
Administrative staff monitor the accounts
received and work with customers that are
delinquent on payment. Customers are subject
to having their service cut off if they are more
than 20 days late in paying their bill. Qualifying
customers (those who have not had their service disconnected within the prior twelve months) have an
opportunity to ask for a deferred payment plan. Approval for a deferment plan is based on payment history and
ability to pay and is typically designed to bring the account current within 4 months. A customer must honor the
conditions of their initial repayment plan before they can be considered for a new payment plan, and a customer
may only have one active deferred payment plan at a time.
Subsidy programs funded by gaming revenues are available for TOUA's low-income and elderly customers.
These programs are utilized by about 500 low-income customers and 400 elderly customers. Subsidy recipients
receive an average of $86 per month towards their utility bill. The subsidy is first applied to water charges, then
electric, propane and telephone in that order. There is also a national energy assistance program which helps
individual customers pay their balances. Customers can also go to the legislative council or district
representative to seek financial assistance with utility bills.
2 The TOUA does not report a loss but rather reports a zero balance and revenue to invest in the utility.
Figure 2. TOUA plumber accessing a sewer line. Photo credit: TOUA.
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Achieving the goal of becoming a zero bottom line utility requires successfully collecting user fees as well as
keeping O&M costs within budget. Serving customers that are spread over 2.8 million acres creates numerous
challenges for the Department for operating and maintaining each CWS and ensuring compliance in an
economically viable manner. Although efforts are underway to consolidate systems, there are systems serving
only 10-15 people that are too remote to be intertied or connected.
Service territory size and customers per mile of pipe is an ongoing issue for the Department. For example, one
or two staff are responsible for operating and maintaining 9 arsenic treatment systems and must check the
systems daily. Since the systems are spread across a large geographic area, this results in a substantial number
of person-hours and transportation costs.
Whenever possible, TOUA tries to find cost-effective solutions for operating and maintaining infrastructure over
a large area. Some of those solutions include:
4 Fire suppression—Currently tanks and water mains are not
sized to provide fire protection. Rather than increase main
size to accommodate fire flows, TOUA is working with the
Tohono O'odham Nation to consider a requirement for
buildings to install individual sprinkler systems for fire
4 Customer response— Investigating customer complaints is
an activity that requires significant driving time and labor.
When a complaint is received, TOUA utilizes a vehicle
tracking system so managers can direct staff that are
already in the area to respond to customers efficiently.
This helps reduce employee travel, saving time and money.
4 Same-day reconnection—Customers subject to having
their service shut off are offered a lower reconnection fee
if they settle their account the same day. Travel costs are
saved if the operator can turn service back on the same
day rather than returning to the area.
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Figure 3. A water main connecting two Tohono
O'odham communities. Photo credit: EPA R9.

Keys to Success
When asked to describe the key components of a successful rate
structure and billing program, TOUA General Manager Mike Bethurem
emphasized that it is imperative for utilities to be very consistent on their
policies. He also stressed that it is important to make sure customers
understand thatthey have an obligation to pay their bills, justas the utility
has an obligation to pay its bills. Bad debt write-off was a common
occurrence in the early years of TOUA, but today the utility's policies are
strictly followed. At the same time, the utility is proactive in helping
customers obtain financial assistance for utility bills when needed. Mr.
Bethurem also stressed that maintaining a strong relationship with
funding agencies is critical as it helps utilities procure outside assistance
to address unmet capital improvement needs.
Myrt Mcintyre, TOUA Operations Manager, also noted that the utility has
benefitted from progressive management. She explained that customer
input are the driver of TOUA's services. TOUA is continually trying to think
outside the box for solutions for their unique systems and expansive
customer base. The Utility focuses on effectively utilizing staff and
improving system efficiencies, including incorporating new technologies
in order to maximize resources.
Looking to the Future
TOUA has identified a number of system improvements and asset
management tasks which will ensure the continuation of reliable and safe
water for TOUA customers. The Department's future plans include:
•	Continuing meter replacement and upgrades.
•	Conducting a leak detection assessment.
•	Developing and implementing an exercise plan for system valves.
•	Replacing service lines.
•	Streamlining management processes to improve staff efficiencies.
•	Collaborating with a local community college to develop an
apprenticeship program.
•	Continuing to address deferred maintenance tasks.
TOUA identified public relations and customer education as program
areas they are working to strengthen. Currently, TOUA educates
customers about water savings ideas and how to keep costs down
through water conservation. The utility also has an annual customer
appreciation day which includes presentations about water efficiency and
Solutions: TOUA's
Plumbing Service Program
Ensuring operation and
maintenance costs stay within
budget is critical to keeping rates
affordable for customers. To
balance high treatment costs,
TOUA works to keep per capita
water use consumption relatively
low and maintain an efficient
system with minimal water loss. As
part of this effort, TOUA has
implemented the Plumbing Service
Under this program, TOUA employs
a certified plumber who is available
to help customers for an additional
fee if they need repairs to their
household plumbing. There are
currently very few certified
plumbers servicing the Tohono
O'odham Reservation, so the
program provides customers with a
service they would not otherwise
have access to. The program is
beneficial to both the customer and
the utility because it reduces water
loss in the system overall.
TOUA is also partnering with a local
community college as part of the
Plumbing Service Program.
Students in the college's plumbing
program have the opportunity to
apprentice with TOUA's utility
plumber. The long-term goal is for
graduates to start their own
plumbing businesses so that TOUA
won't need to keep a plumber on
staff in the future.
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In the future, TOUA would like to expand their
customer education programs. However, further
development of these programs would require
additional staff and budget. TOUA will continue to
evaluate the benefits of customer education
programs and implement them in a way that is
sustainable for the Department.
The TOUA drinking water and wastewater
department is also looking to improve
communications with the Nation's district councils.
The Nation consists of 11 districts, each with its own
council. Recently, TOUA proposed a strategic plan
aimed at strengthening communication with the
district councils to discuss water and wastewater
issues. The plan recommends visiting each district
once per year to exchange information and ideas,
and to discuss any complaints regarding TOUA
services. While it has been logistically challenging to
schedule these meetings, the meetings to-date
have been very successful.
Going forward, TOUA will continue to explore strategies to strengthen customer relationships, while continuing
to provide reliable and efficient service at affordable rates.
United States
Environmental Protection
EPA 810-R-20-006
MARCH 2019
Figure 4. TOUA staff working on a meter. Photo credit: TOUA.
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