By Krista Duhon
news@joplinglobe.com
MIAMI, Okla. — Miami City Council members have a short period of time to implement a proposed utility cost increase before a Grand River Dam Authority rate increase starts reducing the city’s reserve funds — to the tune of about $110,000 a month, according to City Manager Huey Long.
Dan Jackson, managing director and chief executive officer of Economists.com, presented a study of electric, water, wastewater and solid waste rates on Monday to members of the council and the Public Utilities Board.
If the plan is approved, the overall increase in the average residential utility bill will be $10 to $15 per month beginning in January.
Jackson said a 12.5 percent rate increase announced recently by the Grand River Dam Authority is the primary reason for the need to increase rates in Miami, but other factors also contribute to his firm’s recommendation for a long-term rate plan.
“Eight years of not increasing utility rates is catching up with you,” Jackson said. He said the majority of the electric utility budget is dedicated to the cost of buying power, and that the city must increase revenue to fund its operation.
The council is reviewing two recommended approaches to increasing rates. The first is a straight percentage increase that would increase rates proportionately for residential and commercial customers. The second would eliminate the city’s differential between winter and summer rates, and is designed to lead commercial utility clients to implement conservative practices. By design, the second approach would eliminate a current rate plan that Jackson said essentially rewards big utility users by charging them less for high-volume use.
Both plans, according to Jackson, would produce about the same revenue for the city and would subject residents to a utility rate increase every year through 2019. The city’s cost for its electric service alone is projected to increase by a little more than 37 percent, from $13.4 million to $18.8 million, over the next five years.
“Putting either of the plans in place will help you to cover your operation costs,” Jackson said. “And it will help you to pay for capital improvements without having to issue debt.”
As the three-hour meeting drew to a close, Mayor Brent Brassfield said the council has some tough decisions ahead of it. He asked members to prepare to make a decision quickly, as the city will have to begin capturing new revenue immediately in 2010.
Cost breakdown
The monthly rates for the average resident, under one plan posed, would go from $80.84 to $86.43 for electricity, from $28 to $31.95 for water, from $29 to $33.35 for sewer service, and from $14.02 to $15.07 for trash service. In total, the plan would boost the monthly cost of the four utility services from $151.86 to 166.80, or by about 9.8 percent.
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