Utility rate increases approved during the budget process for Fiscal Year 2022-23 went into effect on July 1. City utility customers can expect to see the new rates reflected on their next bill. Chief Financial Officer/City Clerk Jason Muninger fills us in on the details in today’s Director Cut.
First, how were rate increases determined and why is the City implementing them?
The rate increases are the result of a comprehensive water, wastewater and sanitation rate study conducted in Fiscal Year 2020-21, which included recommendations for new rates sufficient to support the operations of the system and capital fees to support mandatory improvements to the system.
The new rates were effective for customers within and outside the city limits and were phased in over a five-year period. The City Council adopted the first year of the five-year rate structure effective on July 1, 2021, and later adopted a slightly modified version of the rate structure for years two through five of the plan. We’re at Year Two now.
Exactly which rates will increase and by how much?
It essentially breaks down like this:
Water Rates
- Water base rates will not increase
- Water incremental rates will decrease by about 3.3 percent
- Water capital investment fees will increase by about 42 percent
Wastewater Rates
- Wastewater base rates will increase by about 8 percent
- Wastewater incremental rates will increase by about 5.7 percent
- Wastewater capital investment fees will increase by about 27.6 percent
Sanitation Rates
- Sanitation cart rates will increase by about 5.8 percent
- Sanitation commercial rates will increase by about 10 percent
What does that mean for the average customer?
The new water rates result in a 2.6 percent increase, wastewater a 12.9 percent increase, and sanitation a 5.8 percent increase. Overall, the new rates will result in a 7.5 percent increase for the average customer.
Can you explain the portion of the bill that will look as though a customer has been charged twice? This has come up in the past and can be very confusing.
It can be. Basically, because the City’s utility billing cycle includes readings taken in June, the charges will be listed prior to July 1 as well as after July 1. This will have the appearance on the bill that the customer has been double-charged, because they will see two lines of ‘water meter base charge,’ and two lines of ‘sewer meter base charge,’ in addition to the sewer charge and waste water investment fee.
But that is not the case; it’s just breaking down the charges prior to the rate increases and after the rate increases went into effect.
Why are these increases necessary?
In some cases, such as the increases in sanitation services, these increases are needed to fund the program’s operation and maintenance at the level of services currently provided. In others, such as water and waste water, the revenue that these increases generate are needed to fund capital infrastructure necessary to meet future demand and Oklahoma Department of Environmental Quality regulations.
For instance, based on the current rates alone, the following improvements are needed:
- Renovation of the Chickasaw Waste Water Treatment Plant — $45 million
- Improvements to the Caney River Wastewater Pump Corridor — $20 million
- Automated Water Meter Infrastructure Replacement — $7.5 million
- Improvements to the wastewater collection system — $3.7 million
- Improvements to the water distribution system — $3.3 million
- Replacement of equipment (pumps, motors, controllers) at the Water Treatment Plant — $1 million
- Water reuse system — $8.2 million (paid partially through grants)
These capital improvements will be funded using low-interest loans from the Oklahoma Water Resources Board. Those loans will be repaid using revenue generated by utility rates over the next several years.
For more information, contact the Utility Billing Office at 918.338.4224.