Published: July 26, 2006 11:52 pm         

Officials study, record other cities’ utility rates; Enid low by comparison

A proposal to increase water and sewer rates by as much as 28 percent is awaiting action by the city commission, and according to officials at other Oklahoma cities, Enid’s rates are lower than those charged by similar-sized cities.

Enid officials said the reason for the increase, which would be phased in over three years, is to recover operating and capital costs of providing utility services, establish fairness and equity in the utility rate structure, streamline and simplify the rate structure and replace the sewer averaging program.

City Manager Jerry Erwin told commissioners in June the increases are needed because of higher infrastructure and personnel costs and because margins between revenues and expenses are decreasing. He said there is a need to annually review utility rates and have an automatic adjustment mechanism.

The city last hiked rates in 2000, when minimum charges and per-gallon rates were raised. Minimums and per-gallon rates also were increased in 1988 and 1990.

Brian Hayden, of Advance Food Co., said he has not seen the proposal and does not want to comment until he does. Advance is one of the largest water users in Enid.

“I know the economy of the city is still increasing, and with the economic growth going on I’m sure the city is looking at the impact on their infrastructure,” Hayden said.

Enid city officials have proposed increasing the residential minimum charge from $7 to $8 and commercial minimums from $13 to $16 for the first 1,000 gallons. The fee for each additional 1,000 gallons for water and sewer would be raised to $1.50 over three years for both residential and commercial users. A new minimum sewer improvement fee of $1.50 per 1,000 gallons would be assessed, and that fee would be raised to $2 throughout three years.

In addition, city officials proposed raising the residential storm water fee to $2, the commercial schedule from $8 to $10 and the maximum fee from $200 to $250. The sewer averaging program would change to a reduced summer rate easier to account for in the city computer system. Discount landfill rates and special trailer rates would be eliminated.

The fee charged for water use outside city limits would be raised to $1.83 per 1,000 gallons throughout three years, and some other water-related fees would increase.

Bartlesville charges $12.19 for the first 2,000 gallons of water and $3.33 for each addition 1,000 gallons for both residential and commercial customers. Muskogee charges $5.85 for the first 200 cubic feet of water (about 1,496 gallons) $4.14 for each 1,000 gallons after that for both residential and commercial customers. Ponca City charges residential customers $7.30 per unit, which is equal to 748 gallons. It’s commercial charge is $21.60 per unit.

Erwin anticipates the revenue produced from the increases to total $3,141,960 throughout the three-year period and then $1 million annually after that.

“We will refine the package and return it to the commission, either at the next study session, or have another special study session about it,” he said. “Every community is impacted by increased operating costs. We can modify the plan to increase or decrease it.”

City officials hope to have everything in place by Oct. 1, when the increases are recommended to begin. Finance Director Jerald Gilbert said some commissioners seemed OK with some rates but had questions about others, and he wants to discuss their concerns.

Gilbert surveyed a number of towns in the state with population near that of Enid’s. He also researched Oklahoma Municipal League’s list of utility rates in the state.

The average cost of residential water usage for 5,000 gallons per month is $18.88, according to OML, and this average did not increase from 1993 to 1996. The average increased 66 cents per month in 1998, 14 cents per month in 2000, 10 cents in 2002, 88 cents in 2004 and $1.37 in 2006.

The average cost of residential sewer services for 5,000 gallons per month is $11.22 in 2006, according to the OML. That is a 5.3 percent increase per year since 2004.

Gilbert said residents of every community surveyed pay more than Enid residents would pay, even after the proposed increases.

“(Erwin) has always wanted to look at the revenue side. It seems the expense side has been pretty well done, so he wants to look at revenues,” Gilbert said. “It’s a good time to be in the city of Enid. Even with the modest raises in utilities we will still be lower than many comparable towns.”

The rate proposal comes wholly with an eye on building a new sewer treatment plant in the next year, Gilbert said. The new sewer improvement fee would help cut the amount the city must borrow to build the plant. Current estimates show it will cost between $20 million and $27 million to build a new sewer plant, although the costs will continue to rise. Financing is in the initial stages, and Gilbert said it may involve a loan from Oklahoma Water Resources Board.

Enid will have more growth than anticipated previously due to the Advance Food expansion and the planned construction of two new ethanol plants, he said. The city also is studying a master water plan.

Robert Hitt, director of developmental services for the city, said Enid has sufficient water capacity for the foreseeable future, but the city may consider adding replacement wells and some new water wells.

Gilbert and Erwin want to match cost with revenue and say the city is not doing that currently. In addition, they are looking at the long-term infrastructure needs. Erwin wants to install a pay-as-you-go plan because of the city’s approximate $80 million indebtedness.

Payment on that indebtedness totals about $1,650 per person, based on a population of 48,000 people, Gilbert said. A number of city fees already have been adjusted, and utility rates are the biggest piece remaining undone.