The Pauls Valley City Council is expected to vote on a utility rate increase during a special meeting Tuesday evening (Sept. 30).
City Manager Joe Livingston told the council earlier this year that a rate increase would be necessary just to meet the current cost of production and distribution of water to customers.
Pauls Valley city ordinance allows for an annual adjustment of utility rates based on the Consumer Price Index (CPI), but those adjustments have not been implemented in several years. As a result, Livingston said the city is losing money on water production and distribution.
During the council’s regular meeting Sept. 23, Livingston told council members a study of the city’s utility rates is complete and the recommendation includes increasing the per 1,000-gallon usage rate from the current range of $3.22-$3.49 to $6.29-$6.81, and increasing the base rate from $20 to $41.
“This is a hard hit,” Livingston said, adding city officials knew an increase was necessary but were hoping it would be less.
Under the proposal, utility bills would increase an estimated $25-$45 over the current rate for water, sewer and sanitation combined, depending on water usage.
One estimate offered by Livingston, shows a utility bill that currently runs $56.93 for water, sewer and sanitation with usage of less than 1,000 gallons would increase to $81.30 under the proposal.
The estimate shows a bill with 1,500 gallons of usage that currently runs $60 for water, sewer and sanitation would increase to $85.83; 3,000 gallons runs $65.77 and would increase to $99.80; and 5,000 gallons of usage runs $74.61 and would increase to $119.10.
Livingston said 80% of municipal authority customers use less than 2,000 gallons of water.
The city is currently under consent orders from the Department of Environmental Quality for repairs needed at the water plant and the city’s lagoons. Those required repairs are estimated to cost around $20 million, Livingston said.
The increase in the usage rate is to cover production and distribution costs, but the increase in the base rate is tied to the cost of the repairs required to rectify the consent order conditions, according to Livingston.
According to discussion at the Sept. 23 meeting, as well as the Sept. 30 agenda, the city is considering a 30-year loan from the Oklahoma Water Resources Board “with a principal amount not to exceed $21,090,000.” The note would be secured by a pledge of revenues.
Livingston told the council he expects the engineers and “municipal finance people” to be at Tuesday’s meeting to answer council member questions.
“They will come in and do the deep dive with you,” he said.
Tuesday’s meeting is at 6 p.m. at Pauls Valley City Hall, 100 W. Paul Ave.
Agendas for the special meetings can be viewed here.
