Hikes needed to cover inflation, rising material, staffing costs
The City Council approved proposed increases to the City’s water, wastewater, and sanitation rates during its meeting on Monday, following the presentation of preliminary recommendations from a utility rate study conducted by NewGen Strategies Solutions.
The Council had discussed potential utility rate changes during budget discussions this year; however, when the budget was approved in May, the Council opted to delay a decision on rate increases until NewGen could present its report. Because the full five‑year report is still in progress, NewGen provided only the analysis of the upcoming fiscal year so the Council could take timely, informed action on FY2027 rate changes.
Rising costs continue to put pressure on the Water, Wastewater and Sanitation Utilities, which face higher operating, maintenance, and capital expenses. The wastewater system, in particular, requires major plant upgrades mandated by the Oklahoma Department of Environmental Quality.
To support these needs, NewGen developed a FY2027 first-year forecast using the FY2026 budget and inflation factors, with the remaining four years of the five‑year plan to be delivered later this year. The full analysis will cover a five-year period and include rates sufficient to pay for operations, maintenance and known capital expenses for water, wastewater and sanitation services — including the ODEQ-mandated upgrades.
Much of the Council’s discussion centered on how to structure water rate increases. During a previous meeting, several members expressed interest in shifting more of the increase to volumetric charges rather than base rates, with the goal of reducing the impact on lower‑use households while applying higher increases to higher‑use customers. That conversation continued Monday as the Council reviewed the water portion of the analysis and considered how different structures would affect both revenue stability and conservation goals.
“The City has no profit margin here,” CFO/City Clerk Jason Muninger said of the proposed rate changes. “We’re dealing with direct cost recovery to maintain the services that people are accustomed to.”
Mayor Jim Curd noted that communities across the country are working to balance the rising costs of producing clean, reliable water with the revenue required to sustain those systems.
“I think it’s a credit to our City for the way we try to keep the rate increases as minimal as possible to pay the costs of what we do,” Curd said. “It’s not always easy to make those decisions.”
Following the discussion, the Council voted 4-1 to approve the ordinance as proposed to amend Chapter 20 of the Municipal Code to adjust water and wastewater rates effective July 1, 2026. The Council also unanimously approved the ordinance amending Chapter 8 related to sanitation rates and fees.
The Council indicated it would revisit the new rate structure later this year to ensure intended revenues are being met.
WATER & WASTEWATER
“One of the things we want to make sure, always, is that there is sufficient revenue being generated,” said Dave Yanke, NewGen partner. “So we’ll look always at current rates, what are you generating versus what is forecasted with regard to operating and capital costs, and then develop rates that ensure that the utility is in a good positive cash flow and you’re in good shape there.”
NewGen estimated that the City’s total water costs for FY2026-27 would be $15,948,989. In order to meet those revenue requirements, NewGen proposed a 22% increase to the City’s minimum bill and volumetric rates, as well as a 25% increase to the capital investment fee.
From 2021 to 2026, water rates have increased, on average, 4.8% each year; however, inflation has been higher than that and, coupled with increasing costs and a decrease in consumption, a higher rate increase was needed to catch up, Yanke said.
“What we’re looking at is a 22 percent increase to get the utility in 2027 up to where it can break even,” Yanke said. “It’s catching up because it’s behind.”
Key water changes (inside city limits, effective July 1, 2026): Minimum monthly meter charges increased (less than 1″ is $20.97; 1″ is $52.44, et al), volumetric block rates rose (for meters under 3”, 0-2,000 is still $0.00; 2,001–10,000 gal is $5.33 per 1,000 gal; 10,001–25,000 is $5.89 per 1,000 gal; 25,001–50,000 is $6.43 per 1,000 gal; and 50,000-plus is $6.98 per 1,000 gal; and, for meters 3” and over, the charge is $5.33 per 1,000 gal), and the water capital investment fee was set at $2.63 per 1,000 gal.
The City’s estimated total wastewater revenue requirements for FY2026-27 are $9,839,320. NewGen recommended a 5% increase to the City’s monthly wastewater charge and volumetric rates, as well as a 13% increase to the capital investment fee.
Key wastewater changes (inside city limits, effective July 1, 2026): monthly billing charge is $18.30, volumetric charge is $4.50 per 1,000 gal, and the wastewater capital investment fee is $4.50 per 1,000 gal.
Billing practices and service levels were not changed. The conservation block structure remains in place (first 2,000 gallons are $0 for meters under 3”), winter averaging for sewer billing continues, and meter sizes and billing cycles remain the same.
SANITATION
Total costs for FY2026-27 for the sanitation service were budgeted at $7,244,262. NewGen proposed a 7.5% increase to residential cart service, roll-off pull fee (no increase in daily rental fee), commercial carts and commercial dumpsters.
Similar to water rates, from 2021 to 2026, sanitation cart fees have increased, on average, 4.5% each year; however, a higher rate increase was needed to catch up to inflation and increasing collection and landfill costs, Yanke said.
“The cost of garbage trucks have skyrocketed … anywhere from 30 to 40 percent (due to) the costs of the materials, the metal, all of the electronics,” said Yanke. “We have a lot of clients that are already at $30 per month per household for that service … You’re looking at going to $21.50 for the services you’re providing. We’ve seen them a lot higher.”
NEW RATES: IMPACT ON AVERAGE* MONTHLY BILL
*Calculated using an average 6,000 gal/month water usage, 4,500 gal/month wastewater usage and a 96-gal polycart for a customer residing inside City limits.
Under the adopted schedule, monthly residential polycart charges were increased as follows:
- 96‑gallon cart — From $20 to $21.50 per month
- 64‑gallon cart — From $18 to $19.35 per month
- 32‑gallon cart — From $16 to $17.20 per month
The fee per additional residential carts was raised from $9 to $9.68 per month.
Commercial container and roll‑off rates were also raised to reflect higher collection and landfill costs, as well as specific commercial rates and roll‑off rental charges.
Regular collection schedules and service levels remain unchanged.
For further information, view the new water/wastewater fee schedule, view the new sanitation fee schedule, view NewGen’s PowerPoint presentation or watch the recorded Council meeting. Staff reports, which include NewGen’s FY2027 study, are also available for both the Sanitation and Water/Wastewater agenda items.