The City Council on Monday approved proposed utility rate increases that will take effect July 1 for all City water, wastewater and solid waste service customers.
The increases are based on five-year recommendations from consultant NewGen Strategies and Solutions after the company completed a comprehensive cost of service and rate design for City utilities last year. The City Council at that time opted to incorporate increases for the current fiscal year rather than the recommended five, but readdressed the issue during meetings held last month and Monday night.
“The rate increases for all City services — water, wastewater, and solid waste — for the average customer, who uses about 6,000 gallons of water per month, is an approximately 7.5 percent, for Fiscal Year 2023,” said CFO/City Clerk Jason Muninger. “It drops slightly each year after that, with 5.5 percent in 2024, 5.2 percent in 2025, and 4 percent in 2026.”
The five-year rate plan will recover the cost of operations and capital needs through 2026, which includes the purchase of a new Automated Meter Infrastructure system, upgrades to the City’s sanitation collection equipment and ongoing wastewater infrastructure needs.
Automated Meter Infrastructure system
According to Water Utilities Director Terry Lauritsen, a new AMI system is needed due to high failure rates with the current system.
“In 2013, the City installed an automated meter infrastructure system for water meters that replaced existing, manually-read meters with meters that automatically read and reported data at predetermined intervals to the City,” Lauritsen said. “The cost of that system was $3.8 million. Unfortunately, it has not worked as promised, and we have experienced a 98 percent failure rate with the meter transmitters. This has resulted in the replacement of the transmitters on 16,086 of the City’s total 16,403 meters.”
Lauritsen reported to the council in March that Mueller Water Products, the company contracted for the existing system, has experienced high failure rates not only in Bartlesville but other municipalities as well, and that the product has fallen far short of what was promised by the company upon implementation.
“City staff has replaced 18,925 nodes, a small part that sits on top of the meter and serves as the meter transmitter,” Lauritsen said. “This means we’ve replaced this part on the entire system plus some. Additionally, there are large delays in receiving warranty parts, and the City is now entering into the pro-rated portion of the warranty.”
He said that between 2023-2028, it is anticipated the current system would cost an additional $300,000 per year to continue replacing the meter transmitters. He said the City could opt to stay with Mueller and pay $350,000 for a necessary upgrade along with the additional $300,000 per year for component replacements, or install a different AMI system. A new system with Mueller would cost approximately $1.5 million; however, while the company has verbally agreed to guarantee the system’s performance, it declined to do so in writing, Lauritsen said.
The rate increases include the cost to install a new system under a different provider for an estimated $7.5 million. This option is required to interface with the City’s software system to allow online bill payment, which is another of the many functions promised with the existing system that failed to deliver as promised, Lauritsen said. A final option would be to go back to manual reads for an estimated $250,000 plus to the cost of associated software.
Water
The water rate increases approved by the council Monday allows for the anticipated purchase of a new AMI system and continues implementation of inclining block rate structure and capital improvement fees.
Water rate increases and Water Capital Investment Fees approved by the council Monday will cost the average residential customer a total of approximately seven percent more beginning July 2022, with similar increases occurring in 2024, 2025, and 2026.
Wastewater
Similar increases were approved for wastewater and Wastewater Capital Investment Fees. Capital needs that include the impending expansion of the existing Chickasaw Wastewater Treatment Plan and improvements to the City’s four pump stations and pipelines necessitate the increases in wastewater rates. In all, upgrades to wastewater infrastructure is expected to cost upwards of $60 million.
Solid waste
Solid Waste services rates will increase $1 per month for the next three years to cover equipment costs, bringing the total cost for residential use with one cart from $17 per month currently to $20 in 2025, with no increase planned for 2026.
For details about the increases, the NewGen report, or anticipated revenues generated by the utility rate increases, see www.cityofbartlesville.org.