Recently-approved rate increases that are expected to add $8 to “average” monthly water and sewer bills will go into effect with the November billing cycle, city officials said.
The utility rate revisions approved at an Oct. 12 special meeting of the Pawhuska City Council are aimed at curtailing projected deficits in the budgets of the water/sewer departments and generating reserves for funding improvements to local plant facilities and replacement of century-old city water lines.
Without the proposed hikes, the City Council was warned to expect revenue deficits amounting to approximately $83,000, similar to what budget records show was incurred during the last fiscal year.
The Council vote followed the presentation of results from a rates study made by Community Services Unlimited, a Arkansas-based nonprofit organization that provides municipalities with free water and wastewater rate studies and other services.
CSU’s Arthur Pittman told officials the increased rates are “not out of line with the rates of other towns” of comparable size, adding that, even with the revised rates, Pawhuska “will be lower than most” similar-sized communities.
Reportedly, local customers have not been assessed a rate increase for water and sewer services since 2009.
The utility rate proposals were unanimous approved by the five council members present for the midday meeting. Ward 2 Councilman Steve Holcombe, who took office in May, was not in attendance.
The short-term study — which covered March through June of this year — projected that, without the raised utility rates, the city would be looking at a year-end deficit similar to what it incurred during FY 2014/15.
Pittman suggested the city should conduct regular studies in order to keep its rates in line with rising costs. One thing which stood out to him, he said, was the fact that the city lost 70 customers during the brief, four-month period of the study.
The troubling results also presented another problem, if there was to be another issue with the Pawhuska water treatment facility or water lines, similar to those which caused a boil order in August, it would likely cost the city upward of $3 million to replace. The city also would not be able to apply for grants to assist with the replacement of the treatment center or numerous aging water lines throughout the city without a rate increase.
Documents were presented to show that Pawhuska residents are paying some of the lowest prices in the region for water services.
Council members viewed the increases as undesirable, but necessary for insuring the health and security of local residents. They pointed to the goal is to create a reserve for funding plant improvements and repair/replacement of aged local water lines.
The study also revealed plant/line problems found during the city’s boil order crisis in August. Shortcomings involving line replacements and repairs that are likely cost as much as $3 million.
Without the rate increases, Pittman also said the city would be ineligible for assistance grants to help fund treatment plant improvements or water line replacement projects.
On their next utility billings, local customers are to see an increase of $2 per 1,000 gallons for sewer — which will amount to a $8 per month for most customers.
For water utility bills, they can expect a base-price increase of $8 per month for the first 1,000 gallons and a 25-cent increase for each additional 1,000 gallons usage per month.
City officials said the decision was difficult, but stressed that the rate increases are necessary to fund repairs to the treatment plants and replacement of aging water lines.